Inflation up as computer games rise

INFLATION has ended its recent downward trend – rising 0.1% in October, latest figures show.

Data from the Office for National Statistics shows the Consumer Prices Index (CPI) increased to 1.3%, up from 1.2% in September.

Smaller falls in transport costs compared with a year ago – notably for motor fuels and air fares, and price rises for computer games were the main contributors to the rise in the rate of inflation.

Food and motor fuel prices, which have historically been upward contributors to the 12-month CPI rate, are currently reducing it by 0.3 percentage points.

Rain Newton-Smith, CBI Director of Economics, said: “Inflation ticked up in October, as we expected, but is likely to remain well below the Bank of England’s 2% target right through to the end of 2015.

“Inflationary pressures are muted, with subdued wage growth domestically and lower oil and other commodity prices. Meanwhile, a cloudier global backdrop presents risks to the otherwise solid outlook for the UK’s economy.

“We do not see the first rise in interest rates happening any time soon and even by the end of 2016 the stance of monetary policy is likely to remain loose, allowing it to provide a bit more breathing space for the UK’s recovery.”