UK consumer prices fall due to cheaper food, fuel

AP News
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Posted: Oct 13, 2015 5:45 AM

LONDON (AP) — Britain's consumer prices fell 0.1 percent in the year through September due to a drop in the cost of motor fuel and a smaller than usual rise in clothing costs.

The Office for National Statistics says pricing wars between supermarkets have helped push down inflation. The inflation rate had been at zero for most of 2015.

UniCredit economist Daniel Vernazza says negative inflation is likely to be temporary, because the drop in oil prices last year will fall out of the calculation by December and "will start to lift headline inflation materially higher."

Low inflation means the Bank of England is facing little pressure to raise its main interest rate, which remains at a record low of 0.5 percent.