Inflation Stays At 3 Per Cent.
The Office for National Statistics has today released inflation figures for October 2017, with the headline CPI inflation staying at 3% pa despite interest rate rises.
There was no fan fare of headlines that the old measure of inflation, RPI, went up again to 4% pa.
Inflation + Housing Costs CPIH
The Consumer Prices Index including owner occupiers’ housing costs 12-month inflation rate held at 2.8% pa for the second consecutive month. This is known as CPIH and a benchmark we believe that is now included owner occupier housing costs as mortgage interest rates are low. This is not CPI but CPIH.
Consumer Prices Inflation CPI
The Consumer Prices Index (CPI) held as mentioned at 3.0% pa for the second monh in a row. This is a key Bank of England (BoE) number and we expect possible rises next month.
Retails Prices Index (RPI) – the old measure of inflation
RPI increased from 3.9% pa in September 2017 to 4.0% pa in October 2017. Although this is no longer an official 'National Statistic', it certainly puts more pressure on the Bank of England to increase interest rates and strengthen the £.
October's prices not only included increased food costs but also reduced oil and fuel prices to keep CPI at 3% pa. Oil and fuel prices have since risen in November again prompting fears of higher inflation and therefore further interest rate increases in the New Year.