Inflation at 5.2%
Tuesday, 14 Oct 2008 17:04
Inflation rises to 5.2 per cent in September
Inflation has risen to 5.2 per cent in September, up from 4.7 per cent in August, according to the Office for National Statistics (ONS).
The consumer price index (CPI), which measures the price increase of a basket of goods, has risen further than expected in September as analysts were predicting a rise of five per cent.
Energy bills were the biggest contributors to the rise, the ONS said, with several major gas and electricity suppliers increasing their prices.
Computer games and hobbies also increased in price compared to last year, while transport costs rose despite a fall in petrol and diesel prices.
However, food costs, which have had a significant effect on the index, fell compared to last year, particularly the price of milk.
Global Insight economist Howard Archer said: "Despite September's bigger-than-expected jump, consumer price inflation is almost certainly now at its peak, or very near to it.
"Indeed, consumer price inflation should soon start falling back sharply and we believe it could well be back down to its two per cent target level by the end of 2009."
The Bank of England had held off cutting the interest rate as inflation continued to rise above the two per cent target but finally reduced the base rate last week as part of a coordinated cut.
The central bank expects inflation to peak in autumn before falling back and has warned it may fall below two per cent next year.