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-UK Sep CPI +2.4% y/y vs +2.7% in Aug
-UK Sep Core CPI +1.9% y/y vs +2.1% in Aug
-UK Sep Input PPI +10.3% y/y vs +9.4% in Aug
-UK Aug House Price Index +3.2% y/y, smallest rise since Aug 2013
By Laurie Laird and Jamie Satchithanantham
London (MNI) - Consumer price inflation fell dramatically in
September, courtesy of decelerating food and transport costs, while core
inflation also retreated, suggesting quiescence in
domestically-generated price pressures.
The consumer price index increased by an annual rate of 2.4% last
month, below the MNI median forecast of 2.6%, after a 2.7% rise in
August. Inflation was last lower in March of 2017, when consumer prices
rose by 2.3%.
Food and beverage prices edged down by 0.2 percentage point between
August and September, following a 0.8 rise in the same month of 2017,
accounting for 0.09 percentage points in the fall in annual CPI.
But excluding food and energy, core inflation also retreated,
slipping to 1.9%, below both the MNI median forecast of 2.0%, and the
2.1% pace recorded in August. Core inflation has not been lower since
March of 2017.
Transport prices also kept inflation in check, subtracting another
0.09 percentage points from the change in CPI, as ferry prices receded
after an unusually-high summer peak.
Consumer prices rose by 0.1% between August and September, compared
to the MNI median of a 0.2% monthly increase, after a 0.7% jump in
The result matched Bank of England staff forecast of a 2.4% annual
rise in September, as reported in the August Quarterly Inflation Report.
That takes inflation above the Bank's 2.0% target for the
nineteenth straight month, and appears to provide a degree of
justification for the Bank's somewhat-controversial decision to raise
interest rates after the Monetary Policy Committee meeting in August,
although a continued deceleration in CPI could delay expectations for
CPIH, which regained its status as a national statistic last year,
fell to an annual rate of 2.2% in September from 2.4% in August,
matching the April outturn. CPIH was last lower in January of 2017,
recording a 1.9% annual gain.
However, intermediate price inflation accelerated, courtesy of a
38.2% annual rise in crude oil prices in September.
Producer input prices jumped by 1.3% between August and September,
for an annual gain of 10.3%, topping the MNI median of a 9.4%
year-on-year rise, after an 9.4% increase in August.
Imported material prices, which comprise some two thirds of inputs
to the manufacturing sector, increased by an annual rate of 8.9% last
month, extending an 8.5% rise in August.
Output PPI also gained momentum, rising by 0.4% between August and
September, for a 3.1% annual gain, above the median forecast of a 2.9%
yearly increase, after a 2.9% rise in August.
Core output PPI accelerated to an annual pace of 2.4%, matching the
MNI median forecast, up from a 2.2% gain in August.
Retail price inflation retreated, in line with consumer prices,
with RPI rising by an annual rate of 3.3% in September, down from a 3.5%
pace in July, well below the MNI median of a 3.5% increase.
Stripping out mortgage interest payments, RPI-X increased by an
annual rate of 3.3% in September, down from 3.4% in August.
Meanwhile, UK house price inflation continued to moderate in
August, with the official House Price Index rising by an annual rate of
3.2%, down from the revised 3.4% annual pace recorded in July. That's
the slowest pace of increase since August of 2013.
London housing inflation continued to lag the rest of the country,
with prices in the capital slipping by 0.2% after recording no growth
in July. London prices have increased in just one month of the past six,
the longest period of weakness since 2009, according to a National
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