LONDON – The rate of inflation in Britain has edged up slightly to 1.3 per cent in October, but remains well below the Bank of England’s target of 2 per cent for the 11th month in a row.
The Office of National Statistics says the annual rate of consumer price inflation rose from a five-year-low of 1.2 per cent in September.
Intense price wars among supermarkets put downward pressure on food, clothing and gas prices.
Chris Williamson, the chief economist of Markit, says prices look set to drop further in coming months, with oil and commodity prices falling.
Williamson says the Bank of England is concerned that low inflation could turn to deflation, “inducing another economic slump as consumers defer purchases in the hope of lower prices in the future.”