Inflation rate holds steady as UK economy grows

The UK's rate of inflation held steady in September while the nation's economy grew the month before, according to the latest figures from the Office of National Statistics (ONS).

The ONS revealed that the CPI rose by 6.7% in the 12 months to September, the same rate as was recorded in August. The CPIH, which includes owner occupiers' housing costs, rose by 6.3% during this time.

Core CPI, which excludes energy, food, alcohol and tobacco, rose by 6.1% in the 12 months to September 2023, down from 6.2% in August. According to the ONS, the CPI services annual rate rose from 6.8% to 6.9%, while the CPI goods rate fell slightly from 6.3% to 6.2%.

David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:

'Our research finds that most SMEs report no increases in sales, exports, or investment. The rise in interest rates has also emerged as a prime concern for almost half of businesses, with increased borrowing costs another barrier to contend with.

'Businesses need clarity on interest rates, as well as a longer-term plan for growth in the economy, focusing on infrastructure, skills, and alleviating trade barriers.'

Meanwhile, the UK economy grew by 0.2% in August, according to the ONS. It said the main contributor to the growth was the services sector.

The 0.2% growth figure followed a fall of 0.6% in July.

Bharier added:

'With GDP growing by 0.3% in the three months to August and by 0.2% on a monthly basis, the UK economy is holding up but remains in a precarious state.

'Our research is clear about the issues UK firms are facing – three years of economic shocks, high inflation and interest rates, skills shortages and trade barriers with the EU. Consequently, most SMEs report no increase in their investment plans.'

Internet link: ONS website ONS website BCC website BCC website