The speed at which costs rising remained unchanged at 6.7% within the 12 months to September in contrast with August.
Slowing meals inflation on objects corresponding to milk, cheese and eggs have been offset by gas costs rising sharply, hitting drivers on the pumps.
In a bid to gradual inflation, the Financial institution of England has elevated rates of interest to five.25%, however held charges at its final assembly.
What does inflation imply?
Inflation is the rise within the worth of one thing over time.
If a bottle of milk prices £1 however £1.05 12 months later, then annual milk inflation is 5%.
How is the UK’s inflation price measured?
The Workplace for Nationwide Statistics (ONS) tracks the costs of lots of of on a regular basis objects in an imaginary “basket of products”.
The basket is often up to date to mirror buying developments, with latest adjustments including frozen berries and eradicating alcopops.
Every month’s inflation determine exhibits how a lot these costs have risen for the reason that similar date final 12 months.
You possibly can calculate inflation in varied methods, however the principle “headline” measure is the Shopper Costs Index (CPI).
Meals costs noticed their first month-to-month fall in two years in September, however gas costs rose sharply.
What’s ‘core inflation’?
“Core inflation” excludes the worth of power, meals, alcohol and tobacco.
This measure was 6.1% in September, marginally down from 6.2% in August.
The Financial institution of England considers this quantity, in addition to CPI, when deciding whether or not to alter rates of interest.
Why have costs risen so quick?
Hovering meals and power payments helped drive inflation up.
This impact was compounded within the UK in February by a scarcity of greens, which took meals inflation to a 45-year excessive.
Alcohol costs in eating places and pubs additionally rose.
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How does elevating rates of interest assist to deal with inflation?
The Financial institution of England has a goal to maintain inflation at 2%, however the present price stays properly above that.
This makes borrowing dearer, and means some folks with mortgages see their month-to-month funds go up. Some saving charges additionally improve.
When folks have much less cash to spend, they purchase fewer issues, decreasing the demand for items and slowing worth rises.
Companies additionally borrow much less, making them much less prone to create jobs; some could reduce employees.
Are wages maintaining with inflation?
That is greater than the speed of inflation was in the identical interval (7.1%), which suggests actual wages grew for the primary time in almost two years.
Nonetheless, unions level out that many staff have obtained smaller pay will increase, and there have been widespread strikes over pay.
The federal government has beforehand argued that massive pay rises may push inflation greater as a result of firms may improve costs in consequence.
When will inflation go down?
Decrease inflation doesn’t suggest costs fall. It simply means they rise much less rapidly.
The Financial institution of England has predicted inflation will drop to five% by the tip of 2023, fairly than the 4% it had been anticipating.
However he admitted that inflation had been “extra sticky than beforehand anticipated”.
What’s taking place to inflation and rates of interest in Europe and the US?
Different international locations have additionally been experiencing a cost-of-living squeeze.
Lots of the causes are the identical – elevated power prices, shortages of products and supplies, and the fallout from Covid.
The European Central Financial institution had been rising rates of interest to attempt to convey eurozone inflation underneath management.
August had seen the eleventh improve since early 2022, with charges at their highest for nearly 20 years.
It warned additional raises would comply with “if acceptable”.
