The Office for National Statistics said consumer price inflation held steady at -0.1 percent on the year, in line with expectations in a Reuters poll of economists.
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The core inflation measure – which excludes energy, food alcohol and tobacco – rose 1.1% year on year, up from 1.0% in September.
Inflation, as measured by the consumer price index (CPI), came in at -0.1pc last month, matching the lowest level seen in the United Kingdom economy since 1960.
Last month, gasoline prices rose 0.4 percent after falling 9.0 percent in September.
Consumer prices rose last month for the first time since July, an inflation signal that could help push the Federal Reserve to increase a key interest rate. Medical care prices rose 0.7%, the largest increase since April. and hospital costs increased by 2%.
United Kingdom inflation figures were just released, showing a 0.1% decline in consumer prices year-on-year, keeping the United Kingdom officially in deflation territory. Core prices were also projected to rise 0.2 percent. The index for all food at home, meanwhile, finished higher, climbing 0.2%.
FTN Financials chief economist, Chris Low, pointed out that though the core CPI is close to the Fed’s 2% inflation target the core PCE is, of course, much lower at 1.3%. Yet even core inflation has hovered below the Fed’s goal. That acceleration followed several years of aggressive Fed easing (2001-2004), and it prompted a subsequent tightening, in which raised the Fed raised its target rate from 1% to 5.25%.
“For now the UK’s weak inflation rate is largely due to external factors – persistently weak global demand and a strong pound pushing down commodity prices”.
The Fed prefers a different inflation gauge, the price index for personal consumption expenditures, which includes a broader range of goods and services consumed in the US than the CPI and assigns them different weights. That is up from 2.3% in September and 2.0% in August.
The average price of goods and services continued to fall into the autumn, official figures showed today, providing a further boost to household finances. Food costs edged upward, but the real gains were found in shelter and medical care.
What’s more, the price of new cars and trucks is basically unchanged over the past year.
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The firm CPI number offers more support to expectations that the Federal Reserve will raise interest rates next month. The CPI less food and energy rose 0.2% (2.5% annualized rate) on a seasonally adjusted basis.
