I’m surprised that today’s CPI numbers aren’t getting more attention given all the (ridiculous in my view) recent speculation that the Fed might curtail QE2 short of $600bn. Today’s core CPI was up only 0.6 per cent on a year ago.
UK retail prices rose 0.4 per cent in September, above expectations of a 0.1 per cent increase. Annual retail price inflation is now 4.6 per cent, down from 4.7 per cent but higher than the 4.4 per cent expected.
Consumer prices were flat on the month, meaning that annual inflation stays at 3.1 per cent, above the government’s target of 2.0 per cent and above equivalent EU and US measures. Read more
UK inflation during July remains the highest among the G7, up 3.1 per cent year-on-year. While consumer prices have been flattening in the eurozone and the US – even stoking fears of deflation – UK inflation remains above 3 per cent as it has been all year. The index is down slightly from 3.2 per cent in June.
Energy is driving the rise, via transportation itself affected by the rise of prices of fuels and lubricants. Transportation price rises have been driving UK inflation since autumn of last year, accelerating at the start of 2010 with a 12-month rate above 10 per cent. Annual transportation prices are now 7.8 per cent up on last year. Read more
Rising energy prices pushed US inflation up the most for almost a year in July. Consumer prices in July rose 0.3 per cent, the first month-on-month rise since March and the largest rise since August 2009, when the rise was 0.4 per cent.
Fuel oil rose 15 per cent, month-on-month, the highest rate for many months (alas, BLS data revisions prevent a decent historical comparison). Gasoline was up 7.4 per cent. Had the four energy indicators remained static, inflation would have declined during July.
Non-energy prices such as food, autos, clothes, shelter and transport continued their decline, however. See the table below. Read more