Britain’s inflation surged in October amid falling transport prices and rising toy prices ahead of the Christmas festivities.
The London-based Office for National Statistics reported that consumer-price growth was 1.3 percent last month, compared with 1.2 percent in September. Economists surveyed by Bloomberg News had expected an increase of 1.2 percent.
However, the inflation is expected to ease soon as Bank of England Governor Mark Carney cautioned about imported “disinflationary pressures” from the euro zone. Another data showed that factory input prices plunged at an annualized 8.4 percent, as imported prices fell 9.1 percent.
The inflation rate remains well below the BOE’s official target of 2 percent since January. The BOE’s Monetary Policy Committee retained its benchmark interest rate at 0.5 percent, a record-low and lowered inflation and growth forecast due to the weak economic growth in Europe.
“It’s largely a function of base effects and movements in volatile categories,” Martin Beck, a London-based economist at the EY ITEM Club, told Bloomberg News. “Otherwise, the inflationary trend is downward and there is a good chance that the measure will drop back again over the next couple of months.”
The ONS data indicates that consumer prices grew 0.1 percent in October from September. Transport prices dropped 1.1 percent, compared with a 1.5 percent decline a year ago. Prices of culture and recreation rose 0.4 percent, mostly due rising toy prices and new game releases.
Core inflation remained slightly unchanged at 1.5 percent in October, as retail-price inflation remained stagnant at 2.3 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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