In 2014 the core inflation index increased by 1.6% and growth of the basic index made up 0.8%.In its turn, CPI grew by 1.4% for the past year and consumer deflation of 2.3% was accumulated.
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For the markets “the “elephant in the room” remains concerns about the Chinese economy, particularly given another weak October trade number over the weekend, as well as continued weakness in commodity prices which yesterday saw the Bloomberg Commodity Index hit another 16-year low”, writes Michael Hewson, chief market analyst at CMC Markets UK. Likewise, the core service is increasing at a pace of 0.3%m/m. The consensus estimate calls for a 0.2 percent month-over-month increases each in consumer prices and core consumer prices.
There is hope that tightening labour market conditions, characterised by a jobless rate now in a range that a few Fed officials view as consistent with full employment, will put upward pressure on wages and drive inflation towards its target.
He added that the effect of the tripling of university tuition fees, which came into effect in 2012, will finally drop out of the annual comparison in October, and could take as much as 0.2% off annual inflation.
Another 0.2% gain was seen for the year-over-year reading on headline CPI.
Federal Reserve officials are looking for signs that inflation is picking up as they consider whether to raise interest rates, which have held near zero since 2008, at their next meeting in mid-December.
The BOE has never faced such a lengthy period of below-target inflation since it began aiming for 2% annual consumer- price growth in 2003, according to ONS records.
Gasoline prices increased 0.4% last month after tumbling the two previous months.
Meanwhile, real hourly earnings rose 2.4% vs. a year earlier, the fourth straight month of acceleration and the highest since April. Food inflation moderated as prices ticked up 0.1%. Under this heading, the CPI for white bread was 324.1, down 0.5% from September but up 1.7% from October 2014. Price declines in other goods and services helped partially offset the increases. The Office for National Statistics said consumer prices edged down 0.1 percent on the year, in line with expectations in a Reuters poll of economists and matching September’s decline. Excluding mortgage interest costs, the gauge is at the lowest in 40 years.
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“We continue to believe that the underlying trend in consumer prices is benign, especially for services inflation”. That’s up from 2.3% in September and 2.0% in August.
