Consumer prices rose 0.3% (month-on-month) in October, on par with expectations. Core CPI (excluding food and energy) prices were up a softer 0.2%, also on top of the median consensus estimate.
Inflation accelerated to 2.5% (year-on-year), up from 2.3% in September. Core CPI (excluding food and energy), meanwhile, edged down to 2.1% from 2.2%.
Core goods prices rose 0.3% on the month, reversing a 0.3% decline the month prior, while core services rose a soft 0.2%,slowing slightly from the previous two months.
Key Implications
Given the fall in oil prices in recent weeks, the rise in energy prices in October is likely to be reversed in November, taking some steam out of headline inflation.
The signal from core prices was mixed in October. While core goods prices picked up speed, this was offset by a slower rate of services growth.
Inflation is likely to move higher in the year ahead. Tariffs are not yet making an obvious mark on inflation, but with more likely in train, it is only a matter of time before they come through in higher consumer prices.
