CPI Increased Broadly in October

United Kingdom inflation figures were just released, showing a 0.1% decline in consumer prices year-on-year, keeping the United Kingdom officially in deflation territory.

Falling prices have not spread to the housing market, however, as United Kingdom property prices rose 6.1 per cent in the year to September, up from 5.5 per cent the previous month.

Howard Archer, chief United Kingdom and European economist at IHS Global Insight, said: “Deflation is likely to prove brief and marginal and it is highly unlikely that consumers will be tempted to start delaying purchases in anticipation of falling prices”. The Fed watches other inflation figures as well as GDP and employment statistics on deciding when to raise rates. With more than five years’ experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic research.

Tamer inflation rates signal changes ahead, while e-commerce is still pocketing the lion’s share of consumer cash.

For the year ended October 30, overall prices were up 0.2% and core prices were up 1.9%. Food prices continue to weigh on the inflation number and this could continue for a few time as the U.K.’s big four supermarkets continue to try and compete with discount stores that have successfully stolen market share in recent years. These advances have been mostly offset by a 17.1 percent decline in the energy index.

Not the stuff that one would generally tighten into but they appear determined. When you strip out energy, you find that inflation has been rising at a 2% annualized pace since the end of 2002, with the exception of the 2005-2008 period, when inflation briefly accelerated. Fuel oil dropped -1.1% for the month, continuing it’s slide.

Rock-bottom interest rates for longer will be good news for home-owners, but offers no respite to savers, who have seen the base rate remain at 0.5% for more than six years. Rent just keeps increasing and this month rent jumped by 0.3% and is up 3.7% for the year.

Over the entire 12 months through to October, the core CPI increased by 1.9%. Core CPI (excluding energy, food, alcohol and tobacco) rose to 1.1% from 1% expected. The price index for medical care services rose 0.8% in October, pushing the year-over-year rise to 3%.

Utahns spend about 6.2 percent of their incomes on medical care.

Real hourly earnings increased by 0.2% for all employees.

Inflation hawks will point to the small increase in so-called core inflation as evidence that these pressures are building. That’s up from 2.3 per cent in September and 2.0 per cent in August.