UK inflation soars to 1% in September - official figures

UK inflation soars to 1% in September - official figures



Official figures suggest the collapse in sterling's value is yet to be felt by consumers, with other factors driving costs up.

Inflation soared to 1% from 0.6% in August - with higher fuel and clothing prices largely responsible for the highest annual rate in almost two years.

Economists were anxiously awaiting the figures for evidence of an upwards impact on prices from the 18% slump in the pound's value against the dollar since the UK's vote to leave the EU.

The Office for National Statistics (ONS) said there was nothing, yet, to suggest widespread pressure on prices from sterling's decline, which makes imported goods more expensive.

It pointed to fuel prices rising at a faster pace in September compared with the same month a year ago. Gas costs were largely unchanged but had been falling in September 2015.



The ONS said there was also upward pressure on inflation from hotel, clothing and restaurant prices.

Mike Prestwood, head of inflation at the ONS, said: "CPI inflation has risen to its highest for nearly two years, though it remains low by historic standards.

"The prices paid by manufacturers for raw materials were unchanged over the month and there is no explicit evidence the lower pound is pushing up the prices of everyday consumer goods."



The ONS measured a 6% rise in clothing and footwear prices month-on-month - a scenario that it said was not unusual as new seasonal ranges were launched.

It also charted a 0.3% fall in food prices - an issue very much in the public glare last week amid a supermarket battle with Unilever.

Some analysts believed the latest figures did reflect a gradual currency effect.

Rob Donaldson, head of corporate finance at accounting specialists RSM, said: "The sharp fall in sterling since the referendum will inevitably have pushed up import prices and whilst manufacturers and retailers will to some extent seek to shield their hard-won consumers from the pain, some feed-through was inevitable."

He added: 'This is likely to be only the beginning.

"The accelerating demise of sterling in recent weeks will take time to feed through as existing stocks are drawn down, existing contracts fulfilled and existing currency hedges do their job.  As those 'cushions' wear off the full impact will feed through to a spike in inflation next year."
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