U.K. headline inflation likely remained at 1 pct in October

Consumer price inflation in the U.K. is expected to have taken a pause from the upward trend seen recently. The underlying forces driving up inflation continue to be in place; however, it is expected to have been countered by the reversal of temporary impact from clothing prices in October, noted Societe Generale in a research note.

In the previous month, the weather was unseasonably warm that impacted the clothing stores who overstocked their autumn/winter fashion lines.  This was seen in a huge decline in sales in that area. The expected consequence would have been heavy discounting that would have decelerated the core inflation to 1.4 percent from 1.5 percent year-on-year. This would offset a small positive contribution from the food and petrol price inflation to maintain the overall consumer price inflation at 1 percent reading, the same as in September, according to Societe Generale.

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