UK inflation was 3.1% in September, exceeding the government’s 3% target level for the seventh month straight. However, the September figure continued what appears to have been an easing in inflation since about March as shown by this chart from the National Statistics Office below:
The largest source of upward pricing pressure came from food and clothing, while downward pressure came from fuel, lubricants, second-hand car, and transport costs.
The chart above highlights the key difference between the easy monetary policy of America and the UK — Inflation is by far the most powerful force which can force a government to reverse easy money policies.
As the U.S. central bank remains concerned about deflation, given near-zero per cent inflation seen in the U.S., the Bank of England has far less wiggle room due to inflation being far higher than in the U.S.. Should the inflation measures above start rising, easy money in the UK could meet a hasty end.