British inflation stabilizes in September at the lowest level in 18 months

Official data showed on Wednesday that annual consumer price inflation in Britain settled at an 18-month low of 6.7 percent in September, contrary to economists’ expectations of a further deterioration.

Financial markets expect the Bank of England to keep interest rates at 5.25 percent on November 2, after keeping them unchanged in September following the announcement of an unexpected drop in the inflation rate in August the day before the decision was issued.

The British pound rose slightly following the release of the data, increasing the chances of the Bank of England raising interest rates.

Data on Wednesday showed that core inflation, which excludes volatile food, energy, alcoholic beverages and tobacco prices and is sometimes seen as giving a better indication of underlying price trends, fell less than expected to 6.1 percent in September from 6.2 percent in August.

Consumer price inflation in Britain remains the highest among major advanced economies, followed by France and Italy, at rates of 5.7 percent and 5.6 percent, respectively, for September.