UK CPI remains in negative territory in October

The UK consumer price index (CPI) remained into negative territory for the second consecutive month in October, figures released on Tuesday showed.

According the Office for National Statistics, UK inflation declined 0.1% year-on-year in October, in line with analysts’ expectations and flat from the previous month reading.

Core inflation, which excludes volatile items such as food and energy prices rose 1.1% year-on-year from a 1% reading in the previous month, a figure analysts expected would remain unchanged.

On a month-on-month basis, inflation was unchanged at 0.1%, in line with forecast.

So far in 2015, consumer price inflation has been below 1% and it has fallen short of the Bank of England’s 2% target since the end of 2013, with Threadneedle Street officials expecting the figure to remain low into next year.

“The Bank of England’s suggestion that interest rates may stay at rock bottom throughout next year may just be the start of it,” said Maike Currie, associate investment director at Fidelity International.

“Interest rates could stay low for the foreseeable future if low inflation turns out to be less cyclical than structural.

“In a low interest-rate environment, investors continue to view equity income as a safe haven and a rare source of yield.”