The rise was fueled by food prices, which have experienced their strongest surge in forty years. However, this was partially offset by a decline in fuel prices and airfares.

“While still at a historically high rate, the costs facing businesses are beginning to rise more slowly, with crude oil prices actually falling in September.” ONS Director of Economic Statistics Darren Morgan said.

Meanwhile, banking stocks are down, due to reports that Chancellor Jeremy Hunt was preparing a windfall tax on the sector.

Investor sentiment is still supported by strong earnings on Wall Street – including Netflix - and the government's U-turn on its disastrous fiscal plan that caused turmoil on the bond markets.

 

Things to read today:

Netflix Ends Subscriber Addiction Phase on a High Note (WSJ)

UK Braces for Sudden Return of Austerity as Hunt Demands Savings (Bloomberg)