Wed 20 October 2021:
According to the UK’s Office for National Statistics, the Consumer Prices Index (CPI) rose 3.1 percent in annual terms in September, down from 3.2 percent a month earlier.
The key reason behind the main reading was higher transportation prices, followed by the hospitality sector (restaurants and hotels), furniture, household equipment, and routine maintenance.
Petrol prices hitting the highest level in eight years, as well as the rising cost of food, drink, secondhand cars and air travel, maintained elevated pressure on households’ living costs. Prior to August, the last time overall inflation was at 3.1% or higher was 2017.
Average petrol prices stood at 134.9p a litre, up from 113.3p a year earlier, hitting the highest level since 2013. However, the figures reflect a period before panic buying at the end of September, when shortages at the pumps led to further reported increases in costs.
In September, the CPI increased by 0.3 percent on a monthly basis.
Governor Andrew Bailey of the Bank of England said on Monday that the bank will “have to act” to combat increasing inflation, signaling that interest rates may be raised.
The Bank of England predicted last month that inflation will climb temporarily in the near term, to 4% in the fourth quarter of 2021, mainly to higher energy and food prices.
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