What's going on?

Consumer prices in the UK didn�t rise as much as expected in October �- and rose less than in September. That means your wallet won�t suffer as much as feared (…yet).

What does this mean?

Virtually all economists expect prices in the UK to start rising more quickly than in recent years because of the big drop in the pound�s value. �A weaker pound causes the price of imported goods to shoot up, and since Britain imports so much stuff, that should (in theory) have an impact at the tills pretty quickly. However, the rate of inflation fell compared to September � at least for consumers.


For companies, it was a different story: prices paid by manufacturers rose by over 12% � way above the 7% they rose in September . By comparison, consumer prices rose 1% (these figures are relative to prices one year earlier). That doesn�t tell the full story, but it illustrates a key point: companies aren�t passing on the full effect of their higher costs (perhaps because competition is so stiff that they are wary of losing customers).

Why should I care?

For you personally: Inflation is coming � but it might not be as bad as predicted.
This is just one piece of data that fell marginally short of expectations, so it�s important not to blow it out of proportion. But it could be foreshadowing less aggressive price hikes than anticipated in the coming months, which would mean more money leftover in your pocket than economists are currently predicting.


For markets: Someone is going to have to take the hit.
Suppliers like Unilever sell goods like Persil washing liquid to retailers like Tesco, who then sell it on to you. Either consumers are going to pay more or retailers and/or suppliers, by not raising their prices alongside their costs, will become less profitable.