UK Retail Inflation Report summary
October 2021
Period covered: Period covered: 29 August – 2 October 2021
Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Subscribe to access this data or take out a free 30 day subscription trial now.
CPI inflation dipped in September to 0.00% YoY, from 3.2% last month. This was below economists expectations of inflation remaining unchanged.
The easing was predominantly driven by the end of the Eat Out to Help Out Scheme (EOHO) a year ago with the Restaurants & Hotels component the only category to exert downward pressure this month. Indeed, prices rose by just 0.3% MoM this year in restaurants and cafes compared with a punchy 4.1% rise as the scheme ended in September 2020.
This was partially offset by rises in most other sectors notably Furniture and Household Goods, and Food.
Furniture and Household Goods prices increased by more this year compared with last, predominantly driven by furniture and furnishings and to a lesser extent, glassware, tableware and household utensils.
Food & Non-alcoholic Beverages also made a large upward contribution to the change in the CPI rate, driven by a range of food components. Ongoing disruptions in supply chains and labour shortages are likely to push food inflation higher in coming months.
Elsewhere, average petrol prices stood at 134.9 pence per litre (ppl) in September 2021, compared with 113.3 ppl a year earlier, exerting upward pressure on inflation. Fuel prices continue to be driven higher by the recent rise in oil prices which currently sit at c.$85 per barrel.
Pressure continued to build in the supply chain with input producer prices rising by 11.4% YoY in September as companies were hit with rising commodity and transport costs. Resultantly, factory gate inflation (output prices) rose to a 10-year high rate of 6.7%.
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Consumer Price Index vs Core Inflation
Source: ONS
