LONDON: British inflation picked up slightly in October from a five-year low as fuel prices fell less strongly than a year ago, leaving the Bank of England under no pressure to start raising interest rates.
Consumer prices rose by an annual 1.3 percent in October, compared with 1.2 percent in September and in line with economists' forecasts in a Reuters poll, the Office for National Statistics said on Tuesday.
The ONS said food and non-alcoholic beverages fell 1.4 percent, marking the longest run of declining prices for those goods since 2000 as supermarkets engage in a price war.
Transport costs fell too but by less than they did a year ago, pushing up the overall yearly inflation rate. Price increases for computer games also pushed up inflation.
Core inflation, which excludes much of the effect of volatile food and energy costs, held steady at 1.5 percent.
The Bank of England said last week that inflation might fall to below 1 percent over the next six months and it expected annual price growth to hit its target of 2 percent only towards the end of a three-year outlook period.
Financial markets are expecting the BoE to start raising rates only in late 2015 or possibly later.
The ONS said prices at the factory gate fell 0.5 percent compared with October last year, indicating a lack of pressure on inflation in the pipeline.
Input prices for factories fell by 8.4 percent, the biggest decline since September 2009.
The fall in inflation in recent months has given some respite to British households with earnings rising by more than prices in September, a welcome turnaround for Prime Minister David Cameron ahead of May's national elections.
Separate data from the ONS on Tuesday showed house prices in Britain rose 12.1 percent in yearly terms in September, compared with an increase of 11.7 percent in August.
Other, more up-to-date surveys have shown the rapid pace of house price growth starting to cool.
In London, property prices jumped 18.8 percent in September, the ONS said.
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