The UK is back into negative inflation – thanks to a dip in food and fuel costs.
According to the latest figures by the Office for National Statistics (ONS), the UK saw a 2.5% drop in the cost of food over the 12-month period, its fifteenth consecutive fall.
Meanwhile the cost of motor fuels fell by 14.9% and the price of household gas also took a dip.
The Consumer Prices Index fell to an annual rate of -0.1% in September.
David Kern, chief economist, British Chambers of Commerce, said:
“Inflation has remained at or around 0.0% for most of this year, and we expect that this will continue over the next few months. Our forecast is that annual CPI inflation will start to creep upwards early in 2016, but will remain below the 2% target well into 2017.
“Low inflation boosts disposable income and supports living standards, thus helping the economic recovery. However recent trade and manufacturing figures have been disappointing, and ongoing global uncertainties, especially in the emerging markets, reinforce our view that the recovery is fragile, and no risks should be taken.
“With inflation unlikely to rise in the short term, the MPC should keep rates at the current low level until well into 2016.”