Mr.Talha Posted October 20, 2021 Posted October 20, 2021 Economic Price rises dipped slightly in September as the economy continued to reopen, according to official figures. The increase in the cost of living, as measured by the Consumer Prices Index, fell to 3.1% in the year to September, down from 3.2% in August. Higher prices for transport were the biggest contributor to price rises. It comes after the Bank of England warned it "will have to act" over rising inflation, suggesting interest rates may rise soon. The Office for National Statistics (ONS) said the inflation rate fell back slightly last month because prices in restaurants rose less this August than last when the Eat Out to Help Out Scheme was running. Under the scheme, diners got a state-backed 50% discount on meals up to £10 each on Mondays, Tuesdays and Wednesdays. Mike Hardie, head of prices at the ONS, said: "However, this was partially offset by most other categories, including price rises for furniture and household goods and food prices falling more slowly than this time last year. "The costs of goods produced by factories rose again, with metals and machinery showing a notable price rise. Road freight costs for UK businesses also continued to rise across the summer." Simply put, inflation is the rate at which prices are rising - if the cost of a £1 jar of jam rises by 5p, then jam inflation is 5%. It applies to services too, like having your nails done or getting your car valeted. You may not notice low levels of inflation from month to month, but in the long term, these price rises can have a big impact on how much you can buy with your money. Although price rises edged lower in September, the increase of 3.1% remains far above the Bank of England's target of 2%. Last month, transport costs made the biggest contribution to price increases. Average petrol prices stood at 134.9 pence a litre, compared with 113.3 pence a litre in September of 2020, when travel was reduced under travel restrictions. The ONS added that the September 2021 price for fuel was the highest recorded since September 2013. Suren Thiru, head of economics at the British Chambers of Commerce, said that further price increases were expected in the coming months "with the increase in the energy price cap, partial reversal of the VAT reductions for hospitality and tourism and persistent supply chain disruption". He warned that rising inflation could disrupt UK's economic recovery by squeezing people's spending power and firms' profit margins.
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