• Annual CPI inflation at 5.2% in September up from 4.5% in August
• Annual RPI inflation at 5.6% in September, up from 5.2% in August
Commenting on the inflation figures for September published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The sharp increase in inflation in September to a high of 5.2%, though broadly in line with the Bank of England’s own predictions, was larger than expected by most analysts. Higher utility prices, in particular heating costs, were the main factor for the increase."
“All the evidence indicates that UK inflation is at or near its peak, and large declines are expected during 2012. High inflation, although worrying, should not have any impact on short-term policy. The MPC increased the QE programme recently in the knowledge that it was likely to result in a temporary rise in inflation."“Additional credit easing would stimulate the availability of lending without increasing the money supply, in turn reducing the risk of adding to high inflation. In addition, low interest rates must be maintained until at least the end of 2012, to make it easier for businesses to invest and grow.”