UK Inflation Remained Below Expectations in September

UK Inflation Data for September Released

The UK Office for National Statistics (ONS) has shared the inflation data for September. According to the data, consumer prices in the UK did not change compared to the previous month. Economists participating in a Bloomberg survey expected prices to show a monthly increase of 0.1%. However, there was no change in prices in September.

Monthly and Annual Inflation Figures

When examining consumer prices on an annual basis, it can be seen that there was a 3.8% increase in September. This figure is below the 4% expected by economists. Notably, the annual inflation rate has stabilized at the level of 3.8% for the past 3 months. This is the highest level observed since February 2024.

Decrease in Core Inflation

Core inflation, which excludes energy and food prices, has declined to 3.5%, the lowest level in the last 4 months. The ONS stated that the increase in automotive fuel prices was balanced by more favorable food prices, and annual service inflation remained stable at 4.7%.

Interest Rate Cut Expectations

While it is not expected that the Bank of England (BOE) will cut interest rates in its upcoming meeting next month, the likelihood of such a move in December 2023 has increased. Investors assess the possibility of the central bank cutting rates before Christmas at 70%. This situation provides some relief for households facing rising food and energy costs, increasing hopes for a reduction in price pressures.