UK inflation slips back below zero

UK inflation slips back below zero

The usual suspect of falling fuel costs, coupled with smaller-than-usual increases in clothing prices pushed the UK inflation rate back into negative territory in September, once again putting no pressure on the Bank of England to lift interest rates. 

The usual suspect of falling fuel costs, coupled with smaller-than-usual increases in clothing prices pushed the UK inflation rate back into negative territory in September, once again putting no pressure on the Bank of England to lift interest rates. The rate of consumer price inflation has now been zero (or close enough to make no difference) since February. It’s expected to climb in the coming months as the big drop in fuel prices falls out of the year-on-year calculation, but core inflation, which strips out volatile components like food and energy, also remains weak at 1.0 percent. This offers little suggestion that underlying inflationary pressures are building in the UK economy, despite continuing strength in wage growth. Figures due out tomorrow are expected to show pay growing at 3.1 percent.

Downside risks to the UK economy are still numerous. Global concerns, especially surrounding China and other emerging markets, have been well-documented, but there are also signs the domestic economy could be faltering. Last week’s PMI survey for the services sector, which accounts for around three-quarters of economic output, showed business activity growing at its slowest pace for more than two years. While the impact of rising wages remains notable by its absence in the inflation figures, I expect the Bank of England to focus on the risks and exercise caution on interest rates. I see them remaining at 0.5 percent into the second half of next year, and quite possibly even longer than that.
 

Read more

Latest News

Read More

Revealed – unbelievable real workplace safety fails

3 July 2025

Newsletter

Receive the latest HR news and strategic content

Please note, as per the GDPR Legislation, we need to ensure you are ‘Opted In’ to receive updates from ‘theHRDIRECTOR’. We will NEVER sell, rent, share or give away your data to third parties. We only use it to send information about our products and updates within the HR space To see our Privacy Policy – click here

Latest HR Jobs

Queen Mary University of London – Health and Safety DirectorateSalary: £43,677 to £51,040 per annum

University of Cambridge – Human Resources DivisionSalary: £33,482 to £39,355 per annum

University of Cambridge – Department of PathologySalary: £35,116 to £45,413 per annum

University of Exeter – PS ConnectSalary: The starting salary will be from £27,644 per annum pro rata on Grade D, depending on qualifications and experience.

Read the latest digital issue of theHRDIRECTOR for FREE

Read the latest digital issue of theHRDIRECTOR for FREE