UK Inflation Edged Up After EOHO Scheme End

SEP CPI +0.4% M/M, +0.5% Y/Y VS +0.2% Y/Y AUG

SEP CORE CPI 0.6% M/M, +1.3% Y/Y VS +0.9% Y/Y AUG

SEP OUTPUT PPI -0.1% M/M; -0.9% Y/Y VS -0.9% Y/Y AUG

SEP INPUT PPI -1.1% M/M; -3.7% Y/Y VS -5.5% Y/Y AUG

Y/Y inflation ticked up in Sep to 0.5%, falling slightly short of market expectations looking for an increase to 0.6%. Core inflation edged up to 1.3%, hitting a two-month high. The largest upward contributions arose from transport and restaurants and hotels. The end of the Eat Out Help Out scheme led to an increase of prices in restaurants. According to the ONS inflation would have been 0.8% in Aug without the scheme and the VAT cut which is still in place. Air fares showed the biggest upward contribution within transport as fares didn't fall as much as a year ago. The ONS noted that car sales increased as consumers are trying to avoid public transport. Output inflation declined for the sixth consecutive month, falling by 0.9%, while input inflation eased for the eighth successive month, recording -3.7% in Sep. Petroleum products revealed the largest downward contribution to output inflation, while the biggest negative contribution to input inflation came from crude oil.