· Annual CPI inflation was 2.2% in October 2013, down from 2.7% in September
· Goods price annual inflation at 1.7% was much lower than the 2.7% rate for services
· Annual RPI inflation was 2.6% in October 2013, down from 3.2% in September
Commenting on the inflation figures for October 2013, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“The larger than expected fall in inflation will ease pressures on businesses and consumers, particularly at a time when wages aren’t rising at the same rate. However while we expect inflation to fall further over the next year, this will not be a smooth process. Some of the October declines are likely to be reversed, especially when energy price increases take effect.
“The UK has been more inflation-prone than other major economies. While latest figures show US inflation at 1.2% and eurozone at 0.7%, ours has been above the 2% target for more than four years. The MPC will see this fall as a sign that there is no short-term need to tighten monetary policy, even though the unemployment threshold is likely to be reached earlier than expected. However, the committee must focus on ensuring price stability to avoid threatening business confidence.”