The UK Consumer Prices Index (CPI) rose by 6.7% in the 12 months to September 2023, the same rate as in August, according to the UK Office for National Statistics.
The CPI rose by 0.5% in September 2023, the same rate as in September 2022.
The Core CPIH (excluding energy, food, alcohol, and tobacco) rose by 5.9% in the 12 months to September 2023, with the CPIH goods annual rate fell slightly from 6.3% to 6.2%, while the CPIH services annual rate rising from 6.1% to 6.3%.
Jeremy Hunt, UK Chancellor of the Exchequer, said that inflation rarely falls in a straight line while expressing confidence that their plan will eventually get inflation under control.
Andy Mielczarek, Founder and CEO of SmartSave, commented on stubborn inflation, saying the “light at the end of the tunnel is still a long way away.”
“Inflation is proving very sticky, remaining at a level that will keep many households on their toes. Inflation does more to individuals’ finances than just increase the costs of their utilities and the weekly shop – prolonged periods of high inflation diminish the value of savings in real terms. Thankfully, we’re in a position now where higher interest rates mean opportunities to achieve competitive returns on savings. But crucially, as many consumers will be acutely aware, not all banks have been passing better rates on to savings customers, essentially triggering a ‘loyalty penalty’ for savers who do not shop around.”
Shojin CEO Jatin Ondhia, said the data shared today dents the confidence that after two years of “turbulence” the British economy has turned the corner.
“Clearly, there is a long way to go to properly stabilise the economy and financial markets. So, prudence must remain the guiding principle for investors and, to that end, diversification continues to be a likely strategy for many, serving as a safeguard against market volatility. Indeed, investors must continue to be proactive, exploring all the different options available to them. It is still difficult to say where inflation and interest rates will go in the medium to long term. People must maintain control over their financial decisions, ensuring that each decision – whether for their savings or investments – aligns with their own risk tolerance and long-term financial goals.”
The road ahead will not be without bumps, said Douglas Grant, Group CEO of Manx Financial Group PLC (LSE: MFX.L), adding that there is a need for “more innovative measures needed to help UK SMEs.
“It is more important than ever that SMEs take this as a reminder to review their existing lending structures and ensure they are prepared for further challenges. Recent research conducted by Manx reveals a significant shift in the financial landscape for SMEs. Compared to last year when only a quarter encountered obstacles, two in five SMEs have now either halted or slowed down some aspect of their operations due to a lack of external financing. Furthermore, the survey uncovered that 15% of SMEs in need of external finance and/or capital were unable to access the required funds. This scarcity of financial resources poses a substantial impediment to SME growth, necessitating immediate action to bridge the funding gap.”
Grant has consistently advocated for the UK government to expand its support of SMEs, as concern for the future of the economy increases.
Many factors have made it difficult for policymakers to get inflation under control, from the high cost of fuel and energy – which impacts everything – to past fiscal policy that continues to work its way through the pipeline, slowing the progress of tamping down the rise in prices.