Today’s inflation data show that consumer price inflation has fallen to 1.7% in August, driven by lower prices overall for recreational goods, and clothing and footwear. These figures, combined with the fastest wage growth in many years, delivers a substantial boost to UK households’ spending power that will help to support the economy.
However, there remain a number of short-term risks to inflation, particularly from external supply shocks. The recent disruption to Saudi oil supplies could manifest as higher energy costs with knock-on impacts on non-oil sectors and UK households if they persist. This, combined with recent sterling weakness in August, could contribute to higher input costs and imported inflation. There is also the possibility that additional supply side shocks could materialise from a no deal Brexit, which could result in higher tariffs and supply disruptions, thus exerting further upward pressure on the price of consumer goods.
UK house price growth hits seven-year low, as inflation cools – business live – The Guardian