UK inflation rate is falling as hotel and restaurant costs fall

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(Bloomberg) –

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.

© 2021 Bloomberg LP


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