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Inflation sticks at 2.7%; House prices soar to record high
by Robert St George on Oct 15, 2013 at 10:02
The Consumer Price Index (CPI) remained at 2.7% in the year to September 2013, unchanged from August.
Inflation has now been ahead of the Bank of England’s 2% target since November 2009.
In September the greatest inflationary pressures came from higher air fares, according to the Office for National Statistics (ONS), although lower petrol and diesel prices were also recorded.
The ONS data revealed too that UK house prices increased by 3.8% in the 12 months to August 2013, up from a 3.3% rise in the year to July 2013.
The house price index now stands at 185.8, outstripping the previous high 185.5 hit in January 2008.
According to the ONS, the average price of a house or flat in the UK now stands at £247,000, the highest level since the index was first calculated in 1968.
The London market was the frothiest, with an 8.7% pickup in prices, while the cost of the average home in Scotland slipped by 0.7% through the period. Excluding London and the South East, UK house prices increased by 2.1% in the year ending in August.
Most worrying was evidence that the government’s Help to Buy scheme is inflating costs for first-time buyers. In August, prices paid by such buyers were 4.9% higher on average than a year earlier. For existing owners, prices increased by just 3.3% in the equivalent time.
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