UK annual inflation steady at 1.8%

UK inflation remained unchanged and below the Bank of England's target in September, figures published today showed.

UK inflation remained unchanged and below the Bank of England's target in September, figures published today showed.

The Office for National Statistics (ONS) said the annual CPI inflation rate stayed at 1.8 per cent in September, the same rate as in August, ending a five-month decline since March's spike to 3.1 per cent.

Analysts had expected the annual rate to rise to 1.9 per cent.

The benign inflation figure will help cement views that the Bank of England will not raise interest rates again in coming months.

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The ONS said that in September, the biggest downward effects on the CPI rate came from costs related to housing and household services, as gas and electricity bills fell due to the arrival of recent tariff reductions.

Housing costs were up only 2.3 per cent against August's 2.8 per cent rise.

Another large downward effect came from clothing and footwear, down 4 per cent, as well as communications services, particularly telephone services, which were 3 per cent cheaper than a year ago.

On a month-on-month basis, September CPI inflation was up 0.1 per cent, below analyst expectations for a 0.2 per cent gain and following a 0.4 per cent rise in August.