MNI DATA ANALYSIS: UK Oct CPI Steady; Core Holds Below 2.0%>

-UK Oct CPI +2.4% y/y vs +2.4% in Sept

-UK Oct Core CPI +1.9% y/y vs +1.9% in Sept

-UK Oct Input PPI +10.0% y/y vs +10.5% in Sept

-UK Oct CPIH +2.2% y/y vs +2.2% in Sept

-UK Sept House Price Index +3.5% y/y; London in 3rd straight decline

By Laurie Laird, Jamie Satchi

     London (MNI) - Consumer price inflation steadied in October, with 

prices kept in check by declining food costs, suggesting quiescence in 

domestically-generated price pressures. 

     The consumer price index increased by an annual rate of 2.4% last 

month, falling short of the MNI median forecast of 2.5%, after a 2.4% 

rise in September. 

     Food prices slipped by 0.1% between September and October, after 

jumping by 0.6% a year earlier, subtracting 0.06 percentage points from 

the change in annual CPI.  The cost of dairy products -- including milk, 

cheese and eggs -- declined by 0.8% over October of 2017. 

     Core inflation was also steady. Stripping out food and energy, 

annual core consumer inflation held at 1.9%, matching the MNI median, 

unchanged from September. 

     Consumer prices rose by 0.1% between September and October, after 

jumping 0.7% between August and September, in line with the MNI median 

forecast. 

     The result fell also undershot Bank of England staff forecast of a 

2.5% annual rise in September, as reported in the November Quarterly 

Inflation Report. 

     That still takes inflation above the Bank's 2.0% target for the 

twentieth straight month, and appears to provide the basis for the 

Bank's somewhat-controversial decision to raise interest rates after the 

Monetary Policy Committee meeting in August. 

     CPIH, which regained its status as a national statistic last year, 

steadied at an annual rate of 2.2%, unchanged from September. 

     Intermediate price inflation also accelerated at output level, 

courtesy of a 15.0% annual rise in the price of petroleum products. 

     Factory gate prices increased by 0.3% between September and 

October, for a 3.3% annual gain, above the median forecast of a 3.1% 

yearly increase. Petroleum products accounted for 1.09 percentage points 

of the total rise. 

     Core output PPI held at an annual pace of 2.4% in October, slightly 

above the MNI median forecast of a 2.3% annual rise. 

     Producer input prices rose by 0.8% between September and October, 

for an annual gain of 10.0%, topping the MNI median of a 9.6% 

year-on-year rise, after an 10.5% increase in September. A 41.8% surge 

in crude oil costs accounted for 6.6 percentage points of total input 

price growth. 

     Retail price inflation also steadied, with RPI holding at an annual 

rate of 3.3% in October, below the MNI median of a 3.4% increase. 

     Stripping out mortgage interest payments, RPI-X declined to an 

annual rate of 3.2% in October, down from 3.3% a month earlier. 

     Meanwhile, UK house price inflation picked up modestly in 

September, with the official House Price Index rising by an annual rate 

of 3.5%, up from the revised 3.1% annual pace recorded in August. 

Regional gains, particularly in the Midlands, Scotland and Wales drove 

most of the acceleration. 

     London housing inflation continued to lag the rest of the country, 

with prices in the capital declining another 0.3% after falling by an 

annual rate of 0.6% in August. London prices have now declined for the 

third straight month, the longest stretch since the three months to 

October 2009. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]