Inflation drops to 0.9%

INFLATION dropped in October with the lower cost of clothing and university tuition fees cited as major factors.

The Consumer Prices Index (CPI) registered 0.9% last month; a 0.1% fall on the figure for September.

While the rate was slightly lower last month, it remained higher than the trend seen since late 2014.

The Office for National Statistics said the main downward contributors to the change in the rate were prices for clothing and university tuition fees, which rose by less than they did a year ago, along with falling prices for certain games and toys, overnight hotel stays and non-alcoholic beverages.

However, the downward pressures were offset by rising prices for motor fuels, and by prices for furniture and furnishings, which fell by less than they did a year ago.

Despite the fall, many analysts have said the overall trend is likely to see the rate rise over the next year.

Chris Williamson, of IHS Markit, said: “UK inflation rose less than expected in October, but looks set to creep higher in coming months as rising costs eventually feed through to consumers.

“Prices paid by factories for their inputs surged 4.6% in October, the largest monthly rise on record. Producers pushed these higher costs onto their customers, many of whom are retailers, with prices charged for goods leaving the factory gate up 2.1% in October.”

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