British inflation slowed unexpectedly last month but the decline probably marked a temporary respite for consumers and the Bank of England is expected to address the acceleration by raising interests rates, possibly in two weeks.
Consumer prices rose 3.1% in annual terms in September, easing back from 3.2% in August, the Office for National Statistics said.
A Reuters poll of economists had pointed to inflation of 3.2% in September although 11 of the 34 analysts who took part had predicted a slowing in the rate of price growth.
The hospitality sector was the largest drag on inflation last month – the result of the “Eat Out to Help Out” restaurant meal subsidy scheme launched in August 2020 dropping out of the annual comparison.
Last month the BoE said it expected inflation to rise slightly above 4% in the last quarter of 2021 but since then energy prices have continued to rise sharply.
On Sunday, BoE Governor Andrew Bailey sent a latest signal that the British central bank was gearing up to raise rates for the first time since the onset of the coronavirus crisis as the risks from inflation mounted.
Photo – EPA-EFE/VICKIE FLORES
