Inflation continues downward trend in September

THE headline rate of inflation fell to 1.2% last month.

The Office for National Statistics said the Consumer Prices Index (CPI) figure was down from 1.5% in August.

It said falls in transport costs, notably sea fares and air fares, and prices for a “range of recreational goods” provided the largest contributions to the slowdown.

Upward effects came from housing and household services, including utility bills.

“If falling food and motor fuel prices were excluded, the rate of inflation would be a third higher,” said the ONS.

The fall effectively means that a basket of goods and services that cost £100.00
in September 2013 would have cost £101.20 in September 2014.

Transport prices overall, fell by 2.4% between August and September this year, compared with a more modest fall of 1.4% between the same two months a year ago.

There were price falls across the sector – most notably from sea fares and air fares. Prices, overall, for these fares always fall in September following the summer holiday period.

The price falls for both were larger this year than a year ago, though neither was out of line compared with previous years.

In terms of recreation & culture, prices overall fell slightly between August and September, compared with a rise between the same two months a year ago. Much of the downward contribution came from price movements for technological goods such as laptop and tablet computers, computer accessories (eg printers and routers), games consoles and computer games. Prices for hardback books and ebooks also contributed to the slowdown in the rate of inflation.

Restaurant and hotel prices rose at a slower rate between August and September this year when compared with the same two months a year ago. The downward contribution came from price movements in restaurants, cafes and canteens.

The Retail Prices Index (RPI), which takes into account housing costs, grew by 2.3%, down from 2.4%.