–UK Petrol Prices Fall 0.7% On Month In September
–Petrol To Knock 0.12pp Off UK Sep y/y CPI Change

LONDON (MNI) – Petrol prices fell in September and will subtract
just over 0.1 percentage point from the change in the yearly rate of
CPI, according to the Market News Petrol Price Index.

The MNI Index shows petrol prices fell 0.7% on the month in
September, having risen by 2.3% last September. That base effect means
petrol prices will have a significant down effect on the September CPI
data, which is due to be published on Tuesday at 0830 GMT.

With consumer price inflation holding well above the 2.0% target
set for the Bank of England’s Monetary Policy Committee, the
disinflationary effects from petrol will be welcome news.

Analysts’ median forecast is for September CPI to come in unchanged
on the month, which will leave it up 3.1% on the year.

National Statistics uses a monthly average for CPI fuel prices,
unlike for the vast majority of other categories, where it uses a single
day collection point.

We have switched the Market News Index to reflect this, and it is
now based on average monthly data supplied by Experian, with weights for
various petrol categories, such as unleaded and super unleaded, obtained
from the Department of Energy and Climate Change’s Digest of UK Energy
Statistics (DUKES).

The correlation between the MNI index and the moves in the fuels
and lubricants category in the official CPI data, which incorporates
petrol, has been strong in recent months.

Our estimate of the August petrol price change was, originally,
wrong due to a data input error. The table below contains the corrected
August data along with our September estimate.

Below are the results of the MNI petrol price index:

% change m/m 2010

! Sep ! Aug ! Jul ! Jun ! May ! Apr !
———————————————————————–
MNI PETROL PRICE INDEX -0.7 -0.9* -0.7 -1.9 0.7 4.3
ONS FUELS/LUBRICANTS n/a -1.0 -0.7 -1.9 0.3 4.5
MNI Index Contibution
to CPI y/y Change -0.12 -0.08 -0.06 -0.24 -0.07 0.01
ONS F/L Contribution
to CPI y/y Change n/a -0.08 -0.05 -0.23 -0.08 0.05

* = corrected.

—London Bureau; Tel: +44207 862 7491; email: drobinson@marketnews.com

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