Tags: UK | Inflation | Steady

UK Inflation Exceeded 3 Percent Limit for Seventh Month in September

Tuesday, 12 Oct 2010 07:47 AM

British consumer price inflation held steady at 3.1 percent in September, still well above official targets, amid falling gasoline prices but big jumps in the cost of food and clothing, official data showed Tuesday.

Despite concerns that the economic recovery is losing steam, the rate remains above the government's 2 percent target. Analysts, however, say the new figures are unlikely to persuade the Bank of England to tighten the flow of money into the economy as long as the growth outlook is uncertain.

The Office for National Statistics said prices for clothing and footwear shot up 6.4 percent, with the largest upward trend coming from women's outerwear, where prices rose with the autumn season. The price of furnishings also rose sharply.

Strong downward pressure came from the airline industry — where fares fell by 27.8 percent between August and September — as well as gasoline and used car prices.

The broad-based retail price index was up by 4.6 percent in September, a slight slackening from 4.7 percent in August. Retail prices excluding mortgage interest payments were the same, the agency said.

Bronwyn Curtis, the head of HSBC's global research operation, said that inflation was "stubbornly high" but told the BBC that the rise in prices couldn't be blamed on higher salaries or increased spending.

"It's not driven by demand," she said. "We're not going to see inflation really move higher and into wages, and then you see that upper wage price spiral."

She added that Britain's central bank was more concerned about keeping the wheels of Britain's economy on track than trying to put a brake on price hikes.

"I don't think they're going to worry about inflation, they're more worried about the economy at this stage," she said.

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British consumer price inflation held steady at 3.1 percent in September, still well above official targets, amid falling gasoline prices but big jumps in the cost of food and clothing, official data showed Tuesday. Despite concerns that the economic recovery is losing...
UK,Inflation,Steady
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2010-47-12
Tuesday, 12 Oct 2010 07:47 AM
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