UK inflation rate is falling as hotel and restaurant costs fall
Britain’s rate of inflation has eased as lower prices for restaurant meals offset some of the rise in transportation costs.
Consumer prices rose 3.1% last month, a notch slower than the 3.2% forecast by economists, the Office for National Statistics said on Wednesday. The reading left inflation well above the Bank of England’s 2% target for a second month.
Financial markets expect the central bank to raise interest rates next month to contain an upward spiral in prices. BOE officials expect the headline inflation rate to exceed 4% this year, more than double their target of 2%.
The cost of transportation led to inflation gains in September, with gasoline prices soaring even before a fuel crisis cut supplies. The prices of used cars have also risen sharply.
These factors were offset by a sharp drop in prices at hotels and restaurants, which fell in September compared to last year.
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