UK inflation rate rises to 10.1% as household services contributed the most
UK Consumer Prices Index (CPI) rose by 10.1% in September 2022, up from 9.9% in August, according to a release from Office for National Statistics.
The annual inflation rate returned to the July level, which was the highest annual CPI inflation rate since January 1997.
The largest contribution to the annual rate in September 2022 is from housing and household services while the second largest contribution came from food and non-alcoholic beverages, which has overtaken that from transport.
As with last month, rising food prices meant that food and non-alcoholic beverages made the largest upward contribution to the change in the annual inflation rate in September 2022, while falling pump prices for motor fuels made a large offsetting downward contribution.
Food and non-alcoholic beverage prices rose by 14.6% in the 12 months to September 2022, up from 13.1% in August while the annual inflation rate for transport was 10.9% in September 2022, down for a third month in a row from a peak of 15.2% in June 2022.
The annual core rate, which excludes energy, food, alcohol, and tobacco, rose to a record-high of 6.5% compared to expectations of 6.4%. On a monthly basis, consumer prices rose by 0.5% in September.
Even so, there are good reasons to think inflation should begin to ease through 2023. Inventory levels among retailers are spiking now supply chains are gradually improving, and more importantly, consumer demand is flagging.
That potentially points to aggressive discounting in coming months, or at the very least slower price rises in durable goods categories.