The rate of inflation remained over three per cent in September, according to official statistics.

At 3.1 per cent the level has remained unchanged from August, but the Office for National Statistics said there had been significant pressures pushing down and driving up prices.

Downward pressures on the Consumer Prices Index (CPI) included a fall in the cost of flying, primarily on long haul flights; there has been a slight fall in the price of petrol compared to a slight rise 12 months ago.

However, there were upward pressures from clothing and footwear, and food. Economists have warned that rising commodity prices were driving up the price of products for UK consumers, affecting inflation.

With the government’s target measure of inflation again over three per cent, the Governor of the Bank of England, Mervyn King, will need to write to the chancellor explaining the Bank’s view on the causes for high inflation and what it will do to ensure it returns to nearer the two per cent target.

With inflation remaining over one per cent above the target, it is likely to lead to further division in the Monetary Policy Committee, where concerns about economic growth have kept monetary policy loose and interest rates low.

Continuing high inflation is likely to add to the concerns of savers and investors seeking a real return on their investments that beat the affects of rising prices.

The ONS said the UK rate of inflation was above the provisional figure for the European Union where the rate of inflation is two per cent.

© Fair Investment Company Ltd
 

Compare fixed rate savings account interest rates »