UK inflation cooled down unexpectedly last month, but the drop marked a temporary break for consumers, and BoE is expected to address the acceleration by hiking interest rates.
Source: Office for National Statistics
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Consumer prices grew 3.1% annually in September, cooling down from 3.2% in August.
The hospitality sector contributed to the most significant decline in inflation last month-result of the “Eat Out to Help Out” restaurant meal subsidy program posted in August 2020, dropping out of the annual comparison.
In the previous month, the BoE stated that it expected inflation to rise above 4% in the last quarter of 2021, but energy prices have continued to increase sharply.
The Consumer Prices Index (CPI) increased by 3.1% in the 12 months to September 2021, down from 3.1% in August. CPI rose by 0.3% in September 2021 compared to the increase of 0.4% in September 2020.
Last Sunday, BoE Governor Andrew Bailey sent out a signal that the British central bank was preparing to raise rates for the first time since the start of the Pandemic as risks from inflation increased.