… in September.
From the ONS:
Consumer Price Indices
• CPI annual inflation stands at 5.2 per cent in September 2011
• RPI annual inflation stands at 5.6 per cent in September 2011
The headlines for the September 2011 consumer price indices are:
• CPI annual inflation stands at 5.2 per cent, up from 4.5 per cent in August. CPI annual inflation has never been higher but was also 5.2 per cent in September 2008
• By far the largest upward pressure to the change in CPI annual inflation between August and September came from increases in gas and electricity charges. There were also large upward pressures from air transport and communication services
• The main downward pressure to the change in CPI annual inflation between August and September came from clothing
• Annual inflation as recorded by the retail prices index (RPI) stands at 5.6 per cent in September, up from 5.2 per cent in August. This is the highest RPI annual inflation rate for over 20 years (it was last higher in June 1991 when it stood at 5.8 per cent)
Hmm. Doesn’t that Bank of England target of 2 per cent seem a long way away?
It’s worth noting today’s CPI reading was higher than expected. (The City consensus was 4.9 per cent, according to Reuters.) And there doesn’t look to be any respite in the near term from higher gas and electricity bills.
Update: 10.41am (London time)
Comment from Ross Walker at RBS:
In terms of the other CPI components, the main upside surprise was in transportation where inflation jumped to 8.9% from 7.4%, reflecting less generous price discounting than a year ago for air fares. There were modest overshoots in communications, restaurants & hotels, and recreation & culture vis-à-vis our forecasts (core CPI was 0.1pp above our forecast)
The bad news is that inflation has (again) exceeded City and BoE expectations. The ‘positive’ aspect to today’s data is that most of the overshoot appears to reflect the way in which the utility price increases have filtered into the data – more of the increase has appeared sooner than expected and this may reflect the various weightings applied by the ONS. Consequently, the % m/m upside contribution from the utilities sector over the next month or so should be more modest than previously assumed. The main concern, therefore, is the further rise in the core CPI rate, which continues to grind higher despite the protracted squeeze on household incomes – the UK’s output inflation trade-off appears even more inauspicious. It is hard to know if any of this will have much impact on BoE policy (ie, prompting a less dovish shift). We doubt it will – at least in the near-term, where worries over the deteriorating economic outlook are likely to continue to dominate the MPC’s thinking.
Consumer price indices: detailed briefing note – ONS