UK inflation falls to 5-year low in September
LONDON—A steep decline in the price of fuel led inflation in the U.K. to slow more than expected in September, easing pressure on the Bank of England for an early rise in interest rates.
The annual headline rate of inflation—measured by the consumer-price index—fell to 1.2% during the month from 1.5% in August, figures from the Office for National Statistics said Tuesday.
That was the lowest inflation rate recorded since September 2009 and was significantly below median forecasts by economists polled by The Wall Street Journal, which showed year-over-year inflation was expected to edge down to just 1.4%. In month-to-month terms, prices remained flat in September compared with 0.4% growth the previous month.
Sterling fell to a fresh one-week low against the dollar and one-month low against the euro after the inflation data. Around 0840 GMT, the pound had fallen to $1.5978 from $1.6017, while the euro jumped to £0.7943 from £0.7918.
The largest contributor to the slowdown was a 6% drop in the price of motor fuels, which in turn lowered the price for transport, followed by food. Core inflation, which excludes the price of energy, food, alcoholic beverages and tobacco, showed a 1.5% price increase–still the lowest figure since April 2009.
