The UK's Consumer Prices Index (CPI) registered a 0.1 per cent month-on-month gain (2.2 per cent year-on-year rise) in October, according to the latest data available from the Office for National Statistics (ONS).
That was substantially less than the 2.5% which the market consensus had pencilled in, yet similar to the step lower seen in consumer prices during the same month on the other side of the Channel, in the Eurozone.
"The question now will be how the latest inflation figures will factor into tomorrow's Inflation Report. Less inflation as a result of lower petrol prices translates into greater purchasing power for consumers and is definitely a positive for the economy. Furthermore, for a time such a dip in prices could help the MPC accommodate any futures wage pressures. As well, today's drop will probably be seen as a one-off and not as a worrying medium-term development. Nevertheless, the MPC may now have to weigh if it may not be a bit of the latter," comment analysts at Sharecast.
The largest downward contributions came from transport, which subtracted 0.21 percentage points from the year-on-year rate of change. That was due to the fact that between September and October of this year they fell by 1.5%, instead of 0.1% as in 2012. Prices of motor fuels led the downward movement.
Education prices rose by 8.2% between September and October 2013, compared with a rise of 19.1% between the same two months in 2012. The effect of that was to lower the year-on-year rate of CPI increases by 0.18 percentage points.
The CPI had risen by 2.7% in September.
By categories, and in terms of month-over-month rates of change, the largest drops were to be seen in the prices of furniture and household equipment (-0.6%) and transport (-0.1%).
If harmonised according to Eurozone practices, then the CPI would have moderated to a 2% clip in the year to October, down from 2.5%.
Source: LiveCharts
That was substantially less than the 2.5% which the market consensus had pencilled in, yet similar to the step lower seen in consumer prices during the same month on the other side of the Channel, in the Eurozone.
"The question now will be how the latest inflation figures will factor into tomorrow's Inflation Report. Less inflation as a result of lower petrol prices translates into greater purchasing power for consumers and is definitely a positive for the economy. Furthermore, for a time such a dip in prices could help the MPC accommodate any futures wage pressures. As well, today's drop will probably be seen as a one-off and not as a worrying medium-term development. Nevertheless, the MPC may now have to weigh if it may not be a bit of the latter," comment analysts at Sharecast.
The largest downward contributions came from transport, which subtracted 0.21 percentage points from the year-on-year rate of change. That was due to the fact that between September and October of this year they fell by 1.5%, instead of 0.1% as in 2012. Prices of motor fuels led the downward movement.
Education prices rose by 8.2% between September and October 2013, compared with a rise of 19.1% between the same two months in 2012. The effect of that was to lower the year-on-year rate of CPI increases by 0.18 percentage points.
The CPI had risen by 2.7% in September.
By categories, and in terms of month-over-month rates of change, the largest drops were to be seen in the prices of furniture and household equipment (-0.6%) and transport (-0.1%).
If harmonised according to Eurozone practices, then the CPI would have moderated to a 2% clip in the year to October, down from 2.5%.
Source: LiveCharts
