UK inflation eases to 2.8% in September

Britain's underlying inflation rate dropped back slightly last month to 2.8 per cent.

Britain's underlying inflation rate dropped back slightly last month to 2.8 per cent.

That was its lowest level since June and one that economists said may persuade the Bank of England to hold off raising interest rates for now.

The Office for National Statistics said the retail price index excluding mortgage interest payments (RPIX) rose 0.5 per cent on the month to give the 2.8 per cent annual figure, which was down a tenth of a point from August's number but above the BoE's 2.5 per cent target for the 11th month.

The number was in line with analysts' forecasts and so had little impact on financial markets. However, gilt futures nudged slightly higher on relief inflation had eased, especially as some analysts still think the Bank of England could be tempted to start raising interest rates as soon as next month.

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