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UK inflation holds steady at 2.4% in October

The UK inflation rate remained steady at 2.4% in October after food price war, confounding analyst expectations of a rise to 2.5%.

The Consumer Prices Index (CPI) figure included falls in food and clothing costs, but rising utility bills and petrol prices, said the ONS.

The inflation figure comes a day after data showed that wages were rising by 3.2% - the fastest pace in nearly a decade.

Core inflation also held steady at 1.9% in October.

That figure strips out the out the effects of energy, food, alcohol and tobacco prices.

City economists had predicted an increase to 2.5% but a price war on the high street, especially among food retailers, drove down the cost of the weekly shop and held back consumer inflation.

The Office for National Statistics said transport costs – particularly fuel – were the biggest factor pushing up the cost of living.

Gas and electricity prices, which tend to track the cost of crude oil, also rose in October compared with the previous month.

Hargreaves Lansdown senior analyst Laith Khalaf said: "Inflation is still above target, but tolerably so for the moment. The effect of weaker sterling has faded, but rising fuel and energy prices have taken up the baton in keeping inflation elevated. Moreover, wage growth is at its highest level since 2008, which suggests domestic inflationary pressures might start adding to the mix too.

"Brexit is still the elephant in the room when it comes to the future path of inflation, and consequently of monetary policy. That's because the pound now waxes and wanes with the Brexit negotiations, and that has a big impact on how much UK consumers pay for imported goods.

"A disorderly Brexit would see the pound fall and inflation rise, and if you believe Mark Carney, that could mean a rate hike or a cut. Meanwhile what the market sees as a positive Brexit deal will deliver a higher pound and lower inflation, and would most likely embolden the Bank of England to raise rates more aggressively."


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