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MNI BRIEF: UK CPI Retests High, 'Significant' BOE Hike Eyed


UK CPI rose to 10.1% in September, retesting the high seen in July, the Office for National Statistics said Wednesday, as higher food and beverage costs sent prices higher. Core inflation was also higher in the month, rising to 6.2%.

The CPI reading is, along with July, the highest since 10.2% in February 1982 on the ONS's synthetic model (the official time series only dates from early 90's) and underscores the challenge facing the MPC when it meets on November 3. Policymakers have already indicated a 'significant' rate hike is on the cards for then, with the latest prices data unlikely to diminish market pricing that suggests a 100 bps hike, followed by a further 75 bps in December.

The main driver was food and non-alcoholic beverage prices, which rose to a record time series high of 14.6% y/y, up from 13.1% in August. The annual rate of inflation for this category has continued to rise for the last 14 consecutive months, from negative 0.6% in July 2021. On the model, it stood at 14.7% in April 1980.

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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