UK inflation rate unchanged at 2.7% in September

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Media captionCheaper petrol was offset by a reduced seasonal drop in air fares, according to the ONS's Philip Gooding

The UK's inflation rate, as measured by the consumer prices index (CPI), remained unchanged in September.

Petrol and diesel prices fell, but this was offset by upward pressure from air fares, the Office for National Statistics (ONS) said.

It means prices are still rising faster than wages, which rose by 1.1% on average over the same period.

The retail prices index (RPI) measure of inflation fell slightly to 3.2% from 3.3% in August.

Air fares fell 18.7% in the year to September, the ONS said, but this was smaller than the 25.2% decrease seen a year ago and so had an upward impact on the inflation rate.

September's CPI figure is used to set the rate for some benefits, including the state pension and those for disabled people and carers.

The Bank targets CPI inflation of 2%, but is currently holding off raising interest rates to control inflation because the unemployment rate is too high.

Under the Bank's policy of forward guidance, it has said it will not consider raising interest rates until the unemployment rate has fallen to 7% or below.

However, the Bank has said it could choose to raise rates if it thinks inflation will still be above 2.5% in 18 months to two years' time.

Food price rise

The ONS numbers showed that food inflation stood at around 4.8%, little changed on last month.

The price of fruit and vegetables rose slightly, driven by an increase in the cost of plums and organic apples, as well as cauliflowers, onions and premium potato crisps.

However, a drop in the price of other foods including bread and cereals, fish, jam and chocolate had a downward effect.

"The disconnect between wages and prices continues apace and following news from the service industry that consumer facing companies are struggling will cast further doubt on a consumer-driven recovery," said Jeremy Cook, chief economist at the currency brokers World First.

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Media caption"Everything's going up apart from salaries" - why are wages lagging behind inflation?

The British Retail Consortium (BRC) said September's RPI figure would be used to calculate next year's increase in business rates meaning the jump would hurt High Street shops.

The BRC said the increase would mean retailers would now pay £3.44 in business rates for every £1 they pay in corporation tax in 2014.

"Across the country today, retailers are adding up what this increase in the RPI will mean for the cost of their business rates next year. Many will be wondering whether they will be able to stay open," said Helen Dickinson, director general at the BRC.

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