New inflation data from ONS, covering September 2021, shows that inflation remains elevated, with pressure occurring across a broad range of goods and services.
“All items” inflation for September was +3.1% year-on-year, when measured using the CPI measure – this is slightly above the target range set for the Bank of England’s Monetary Policy Committee (MPC).
The data suggests a very slight slowdown in inflation since August, when the equivalent value was +3.2%. However, this may be misleading - inflation for foodservice was unusually high in August 2021, because prices that month were compared with process during the government’s Eat-Out-To-Help-Out scheme of 2020.
CPI inflation for food and non-alcoholic drink was much lower at +0.8% year-on-year, but this measure has now been positive for the last two months.
Further up the supply chain, UK manufacturers reported strong inflation in energy and material costs – these are now at record levels.
With labour costs also rising strongly, it is likely that the inflation face by shoppers will continue to rise, at least in the short term.