Reversing a two-month easing streak the retail or the Consumer Price Index (CPI) inflation for the month of September rose at 4.41 percent, compared to 3.74 percent in August and 6.46 percent in September a year ago, mainly due to costlier food items in general and beverages and pulses in particular.
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Figures this week showed that United Kingdom consumer price inflation was minus 0.1 per cent in the 12 months to September, while manufacturers’ output prices fell by 1.7 per cent in the period.
Peter Cameron, associate fund manager at EdenTree Investment Management, said deflation would make the Bank of England less likely to up interest rates this year. Data on Tuesday showed imports plunged by a fifth year on year last month as slowing growth wreaks havoc on global commodities prices. Accordingly, the annual rate of infation based on the final index stood at -4.00% as compared to -4.05% reported on that date, it added.
With consumer inflation well below the government target of 3 per cent all year, the central bank has further capacity to spur lending even after cutting interest rates five times since November.
Inflation was pulled lower as food prices fell by 2.5 per cent in the year to September as the supermarket price wars continued to grip the grocery industry.
In September 2015, the food and motor fuels groups in total reduced the CPI 12-month rate by approximately 0.8 percentage points.
According to Li, inflation slowed on a monthly basis in September, mainly because the prices of pork and vegetables didn’t rise as sharply as in the previous month.
The consumer price index rose 1.6% on the year, below both the market consensus forecast of 1.8% compiled by Dow Jones and the 2% seen in August. The rate also dropped in August and was the greatest drop since the global financial crisis hit in 2009.
JPMorgan Chase Asia Pacific vice chairman Jing Ulrich said September’s CPI is mainly underpinned by stable pork prices while the continuous drop of PPI reflected the weak domestic demand.
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According to Eurostat figures the lowest annual rates were registered in Cyprus with -1.9%, Romania with -1.5% and Spain with -1.1%.
