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Inflation hits three-year low, but food inflation strengthens

Inflation hits three-year low, but food inflation strengthens
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British inflation fell by more than expected last month, including key measures watched by the Bank of England, according to data on Wednesday that bolstered bets on an interest rate cut next month.

The rate of annual consumer price inflation dropped to 1.7 per cent in September from 2.2 per cent in August, the lowest reading since April 2021, the Office for National Statistics said.


Sterling fell by half a cent against the US dollar immediately after the figures were published.

Core inflation, which excludes energy, food, alcohol and tobacco, dropped to 3.2 per cent from 3.6 per cent in August.

"Lower airfares and petrol prices were the biggest driver for this month's fall. These were partially offset by increases for food and non-alcoholic drinks, the first time that food price inflation has strengthened  since early last year," ONS chief economist Grant Fitzner said.

There were also signs of weaker inflation pressure ahead. Prices charged by factories for their goods fell by 0.7 per cent in the year to September, the biggest fall since October 2020, during the COVID pandemic.

The inflation rate was lower than the 1.9 per cent rise that analysts forecast and has cemented expectations that the central bank would likely cut interest rates again in November.

"It is absolutely amazing to see such a dramatic drop in the UK's CPI number, and the news had brought nothing (but) good things for the Bank of England," said Naeem Aslam, chief investment officer at Zaye Capital Markets.

In August, the BoE reduced it key rate for the first time since early 2020, from a 16-year high of 5.25 per cent as inflation returned to normal levels.

But it decided against a second reduction in a row in September.

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Independent retailers are demanding tougher police action, more bobbies on the beat and harsher punishments as shoplifting levels reach an all-time high, a new survey reveals.

A whopping ninety-one per cent of respondents to a survey conducted by the Federation of Independent Retailers (the Fed) called for more police patrols on streets, while a similar number - 90 per cent - said that shoplifters should be handed harsher sentences.

Seven out of 10 respondents (72 per cent) said their stores had experienced shoplifting, break ins and damage to property, while they and their staff had been physically or verbally threatened.

Just under half of respondents (47 per cent) said they and their employees had been threatened or had suffered abuse and violence when asking for proof of age ahead of selling an age-restricted product.

Forty-four per cent reported that they and their staff had faced abuse or violence because they had refused to make a proxy sale – selling an age restricted product to a customer buying for a minor.

The results of the Fed’s survey came as new figures from the Office of National Statistics revealed that shoplifting was at a record high, with almost half a million offences recorded last year.

According to the ONS, 469,788 offences were logged by forces in the year to June 2024 – a 29 per cent increase on the previous 12 months.

The ONS added that this figure was the highest since records began – in March 2003.

“Inadequate responses from the police and a slap on the wrist for offenders means that shoplifting is soaring, and offenders are becoming more aggressive and brazen,” said Fed National President Mo Razzaq.

“From the responses we received, it is clear that real action is needed by police, by courts and by the government to stem the overwhelming tide of crime against retailers and their staff. Everyone deserves to feel safe at work and for their businesses to be protected against criminals.

“Fed members are also sending a clear message that one of the catalysts for verbal and physical abuse in stores is asking for proof of age before selling an age restricted product. If the government presses ahead with its plans to phase out smoking and vaping through a progressive ban to gradually end the sale of tobacco products across the country, independent retailers will be subject to even greater levels of violence, abuse and theft.”

Calling for action from the government and not just words, Mr Razzaq continued: “Without effective deterrent, criminals and opportunistic members of the public will continue to commit crimes.”

According to Ministry of Justice statistics, during the year to March 2024, 431 fines were handed out for retail theft under £100, while Home Office statistics for the same period show that 2,252 cautions were accepted for shoplifting.