Prices and Wages

摘要

1. The annual rate of CPI inflation rose to 5.2% in September, while the broader measures of inflation, RPI and RPIX, increased to 5.6% and 5.7% respectively. The most recent pickup in inflation reflects the implementation of sizeable price rises for domestic utilities bills. Gas prices have already risen by 15.3% and electricity prices by 8.5% over two months, with further increases set to hit the index in October. 2. In addition to the utility price rises, the fact that inflation remains persistently high can be attributed to a series of one-off effects, such as the increase in VAT in January and the steep increases in commodity prices - particularly food and fuels - in the spring. However, commodity prices have begun to ease recently, in reaction to the weakening global outlook. Though this has not yet been reflected in weaker producer output price inflation, we expect this to begin to feed along the supply chain over the next few months and to eventually reach consumers. Though inflation is likely to remain around the 5% mark over the next couple of months, and to average 4.5% over 2011 as a whole, there is a good chance that inflation has now reached its peak.