A bit of good news for the UK – but only a bit. Inflation rates came down slightly from their three year high of 5.2% in September, now at 5%, according to the Office for National Statistics (ONS). The slowdown was due mainly to food prices lowering, to air transportation and to petrol prices.
Food Price Wars
Britain has been witnessing an all-out food price war, as the UK largest supermarkets are having price wars and food prices fell .9% this month as compared with last month.
Gas and electricity bills, however, have moved up significantly, rising 1.4% and 1.5%.
As Brian Hilliard of Societe Generale said,
“It’s good news and it should help to reinforce the Bank of England’s conviction that inflation has peaked. I think that is correct.”
He continued, “However, I think the emphasis tomorrow in the inflation report will be on the deepening gloom from the damage the eurozone crisis is doing to our economy and growth prospects.”
The British Retail Consortium (BRC) has said that shop price inflation has lowered dramatically to 2.1%, which is its lowest point this year. The change is due, they explained, to the supermarket price war, which has also led to petrol wars.