UK inflation remained unchanged in October, defying expectations for a modest increase, and allows the Bank of England to focus on the strengthening pay growth that can ultimately lead to an interest rate hike, if the Brexit deal is approved in time.
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The consumer price index rose 2.4% year-on-year, same as in September, figures from the Office for National Statistics showed on Wednesday.
Economists had expected a modest acceleration in the inflation figure to 2.5%. Inflation peaked at 3.1% in November 2017, much above the Bank of England's 2% target.
On a month-on-month basis, the CPI edged up 0.1% in October, which was slower than the 0.2% gain economists had forecast.
Core inflation, which excludes the prices of energy, food, alcoholic beverages and tobacco, was also steady in October, at 1.9%.
The figure was expected to climb to 2%. "UK core inflation stayed below target again in October and is likely to stay there over coming months," ING Bank economist James Smith said. "But signs of rising wage growth are still the key for Bank of England policymakers and could prompt a rate hike in May - assuming, of course, a 'no deal' [Brexit] situation is avoided."
Figures released by ONS on Tuesday showed that UK net pay growth in the three months to September was the fastest since the October to December period of 2008.
Excluding bonuses, average earnings grew 3.2% year-on-year after a 3.1% increase in the three months to August.
In October, food prices rose 0.4% year-on-year, while clothing prices fell 0.9%. Transport costs climbed 3.1%. Output price inflation accelerated to 3.3% from 3.1%. Economists had expected the rate to remain unchanged. In contrast, input price inflation eased to 10% from 10.1%. Economists had forecast a lower figure of 9.9%. Separately, the ONS reported that house price inflation, based on the Land Registry data, rose to 3.5% in September from 3.1% in August. That was higher than the 3.2% economists had forecast. ■