UK inflation rises to highest level in two years
19 Oct 2016
Inflation rose to 1.0% in September, up from 0.6% in August, according to official figures from the Office for National Statistics (ONS).
Although low in historical terms, the increase in Consumer Price Index (CPI) inflation is the sharpest since June 2014, and the 1% rate is the highest since November 2014.
The Retail Prices Index (RPI) measure of inflation, which includes mortgage interest payments, also rose to 2.0% in September – up from 1.8% in August.
The ONS attributed the change in the CPI inflation rate to rising prices for fuel, hotel rooms and clothes – with the last seeing the largest price rises since 2010.
Although the post-referendum fall in sterling is widely expected to eventually lead to increased prices for household items, the ONS said that there was ‘no explicit evidence’ that the weakened pound was the cause for the latest rise in inflation.
The Confederation of British Industry (CBI) stated that it expects the depreciation of sterling to ‘push up prices through the course of next year, which will hit the pound in people’s pockets’.