Inflation remained at 6.7% in September

September Consumer Price Index (CPI) figures from the Office of National Statistics (ONS) have showed the rate of inflation remained unchanged on the previous month, with prices on average 6.7% higher than in September 2022.

Inflation remaining unchanged on the previous month ends three consecutive months of falls and will raise the likelihood of further interest rate rises by the Bank of England. Inflation is currently at its lowest rate in a year and a half although remains above the Bank’s 2% target rate.

A slowdown in the rate of price growth for food and drink was among the key contributors keeping the CPI from rising this month. Although prices at the supermarket were 12.2% higher than in September 2022, this is down from the 13.6% increase recorded in August, while month-on-month figures saw prices in the category down slightly (-0.1%) on average.

Price rises for food and drink in restaurants, however, continued as previous wholesale increases were passed on to consumers. Nick Collins, CEO of Lounges group of bars and restaurants, which includes Berretto Lounge in Stockport town centre, and Brezo Lounge in Cheadle, told the BBC the group had needed to raise prices to customers by 8% this year to cover rising food and drink prices.

Looking ahead to October, the headline rate of inflation is expected to fall once again following the reduction in the Ofgem’s price cap for household energy bills.

Following the unexpected fall in inflation in August 2023, the Bank of England’s Monetary Policy Committee chose to hold interest rates at 5.25%, however, a stall in progress towards slowing price rises will increase pressure on economists to announce a further rise in the base rate when they next meet on 2nd November. The Bank’s current estimates for inflation expect it to fall to around 5% by the end of the year.

The Prime Minister will also be under further pressure ahead of the Chancellor’s Autumn Statement on 22nd November – Rishi Sunak pledged in January to reduce inflation by half to 5.525% by the end of 2023.