The fall in the pound begins to eat into living standards

FOR the 354 years for which there are data, Britain’s average annual inflation rate has been about 2%. So the news that inflation rose to 1% in September, up from 0.6% in August, may not seem significant. But it is bad news: there is a lot more inflation to come, and the big losers from rising prices will be the poor.

The obvious culprit for rising prices is the 15% drop in sterling since June. Britain imports nearly all of its clothes, and month-on-month inflation in clothing now exceeds 5%. However, elsewhere sterling’s decline has not yet been felt. Currency-hedging by wholesalers stops prices from rising immediately. Retailers pressurise suppliers not to raise prices, as demonstrated by a recent spat over the price of Marmite, a yeasty spread. The overall price of food did not budge in September (the average price of a jar of Marmite actually fell, as shops cut prices to lure customers).