Consumer price inflation (CPI) was static in September remaining at 3.1%, according to the Office of National Statistics (ONS).
The ONS said that although the figure remained unchanged, putting it above the Bank of England’s 2% target for the tenth consecutive month, there has been significant upward and downward pressures on CPI annual inflation. The Retail Prices Index (RPI) fell back marginally from 4.7% in August to 4.6% in September.
Clothing, footwear and food contributed the largest upward pressures to the change in CPI inflation. Clothing and footwear prices rose by 6.4%, a record for August to September. The largest effect came from women’s outerwear, where prices rose sharply for the autumn season.
Meanwhile, meat and fruit saw the largest upward effects in food, with meat prices rising 0.3% from August to September.
The largest downward pressures came from a variety of transport costs, including air travel and fuel.
The ONS added that the RPI was affected by similar factors.
The British Retail Consortium (BRC) said the RPI has remained much higher than most retailers had anticipated, and has warned that business rates will be significantly higher than retailers have budgeted for unless the Government takes action to use “alternative ways” of calculating business rates increases.
Currently, September’s RPI is used to calculate the annual increase in commercial property prices which will be introduced in April.
BRC director general Stephen Robertson said: “No one seriously expected inflation to fall so stubbornly slowly from the highs of January and February. As recently as this spring most forecasters expected RPI to be significantly lower by now. Few retailers have budgeted for the scale of business rates that may now result.
“With the Government set to announce big public spending cuts in little more than a week, this business rates battering can only undermine retailers’ proven ability to maintain and create alternative jobs.”