Higher fuel prices stop UK inflation from falling in September

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British consumer price inflation (CPI) held at an 18-month low of 6.7% in September, official data showed on Wednesday, bucking economists' expectations for a further decline and raising the possibility of a further rise in interest rates.

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18 Oct 2023

The Bank of England is still expected by financial markets to leave interest rates at 5.25% on Nov. 2, having kept them on hold in September following an unexpected drop in the August inflation rate the day before it announced its decision.

But sterling climbed following Wednesday's figures from the Office for National Statistics. These showed that a rise in fuel prices between August and September put upward pressure on the annual CPI rate, which economists had expected to drop to 6.6%.

«Progress in bringing inflation down is proving slow, with the UK generating higher levels of inflation than any other major industrialised nation,» said Ian Stewart, chief economist at accountancy firm Deloitte.

«The persistence of underlying inflation, and service price pressures, suggests that interest rates are likely to