(Bloomberg) --

Britain’s inflation rate eased as a drop in the price of eating out offset some of a surge in transportation costs.

Consumer prices rose 3.1% last month, a notch slower than the 3.2% forecast by economists, the Office for National Statistics said Wednesday. The reading left inflation well above the Bank of England’s 2% target for a second month.

Financial markets expect the central bank to lift interest rates next month to contain an upward spiral in prices. BOE officials expect the headline inflation rate to jump above 4% this year -- more than double their 2% target. 

The cost of transportation led gains in inflation in September, with a hefty jump in petrol prices even before a fuel crisis reduced supplies. Used car prices also rose sharply.

Those factors were offset by a sharp decline in prices at hotels and restaurants, which fell back in September when compared with a year ago. 




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