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Petrol drives up inflation in Britain

Soaring oil prices has helped pump inflation in Britain up to 2.5 percent in September, the highest rate since 1997, according to official figures issued on Tuesday.

The Office for National Statistics (ONS) said consumer price inflation (CPI) rose from 2.4 percent in August to 2.5 percent in September, the third month in a row that inflation has been above the target of 2 percent set by the Bank of England, Britain's central bank.

Fuels and lubricants had contributed 0.14 percent point to the overall rise in CPI as average prices for ultralow sulphur petrol rose 4.6 pence per litre in September, compared with a rise of just 0.1 pence a year ago, the ONS said.

But annual growth in the Retail Price Index, on which most pay deals are based, eased to 2.7 percent in September from 2.8 percent the month before, as the effect of petrol costs was slightly offset by, among other things, falling footwear and clothing prices.

Policy makers said the latest inflation figure is below the level of 2.7 percent they had expected, predicting that inflation would remain above the 2 percent target in the next few months.

In its quarterly inflation report in August the Bank of England predicated CPI inflation would rise above the government's 2 percent target in the short term but it would then ease off before once again gathering strength and passing the 2 percent level at the end of its two-year forecast period.


Source: xinhua