September’s UK inflation is at the biggest rate in over five past years, driven by the food and transport prices. Consumer prices went up 3% year-on-year, the rate not seen since April 2012, it is also higher than the August’s 2.9%, according to the Office for National Statistics’ data of today.
This growth puts extra pressure on the country’s households and may encourage BOE officials to raise interest rates, which would be the first such instance in a decade. Higher oil, petrol prices signify there’s a big probability of inflation going up further in October, BOE’s Dave Ramsden wrote in a note to lawmakers, made public some time before the data came out.
This means it will be one percentage point higher than the BOE’s target of 2%, obliging Governor Mark Carney to provide a public written explanation to the Treasury.
The pound neutralized an advance following the information on inflation to trade with close to no changes at around $1.32 this morning.
As the report demonstrates core inflation remained at the previous level of 2.7% in September, the highest since the end of 2011.