FALL IN INFLATION STRENGTHENS CASE AGAINST INTEREST RATE RISE
October 14 2014.



- Annual CPI inflation in September 2014 was 1.2%, down from 1.5% in August

- Goods price inflation in September 2014 was 0.2%, while services inflation was 2.4%

- The largest contribution towards the slowdown in inflation between August and September was transport costs and recreational goods

- Core CPI inflation (excluding energy, food and alcoholic drinks) was 1.5% in September 2014


Commenting on the CPI inflation figures for September 2014, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said: “These figures confirm that inflationary pressures in the economy remain muted and have eased in recent months. With oil and food prices now falling, there is a possibility that CPI inflation will fall below 1% before the end of this year. This fall in inflation, coupled with weak wage growth, reinforces our call for the MPC to keep interest rates at their current level for the foreseeable future.

“Recent surveys, including our Quarterly Economic Survey, show that the recovery is on track, but is still fragile and faces challenges. Given global economic uncertainties this is clearly not the time to put the recovery at risk with premature interest rate increases. The MPC’s main priority must be to underpin business confidence by giving businesses the stability to plan and invest without any unwelcome surprises.”