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Inflation

United Kingdom Inflation Rate 1989-2015 

Consumer prices in the United Kingdom rose by 3 percent in the year to September 2017, as widely expected, following a 2.9 percent gain in the previous month. It was the highest inflation rate since April 2012, mainly due to rising prices of food, transport and leisure activities. The annual core inflation rate, which excludes prices of energy, food, alcohol and tobacco, stood at 2.7 percent, unchanged from the previous month's five-year high and in line with market consensus. Inflation Rate in the United Kingdom averaged 2.58 percent from 1989 until 2017, reaching an all time high of 8.50 percent in April of 1991 and a record low of -0.10 percent in April of 2015.

Consumer prices index (CPI) is the government's preferred measure of inflation. It is used for international comparison and the government inflation target for the Bank of England Monetary Policy Committee. It is available as an index from January 1997, with estimates back to 1988. It excludes mortgage interest payments and council tax. As of the 2010 budget, CPI as part of the triple-lock, is used to index state pensions in place of RPI.

Why is inflation important?

Keeping a healthy cash flow throughout your life is essential and one of the biggest risks to capital is inflation risk. It is important this is taken into account with our recommendations and considered when discussing your attitude to investment risk within our client meetings.

Source: Trading Economics

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