The rate of inflation has eased slightly to 6.7% confounding the predictions of economists that it would rise.
The Office for National Statistics (ONS) said the consumer prices index (CPI) measure slowed in the 12 months to August, from the 6.8% figure reported the previous month, thanks to food rising at a weaker pace during the month compared to August 2022.
The pace of price growth in the economy, which has eased from a peak of 11.1% just under a year ago, was placed under the greatest pressure by surging global oil costs – being felt across the economy but most visibly at fuel forecourts.
By my reckoning this is the biggest undershoot for inflation versus expectations we’ve seen since the beginning of the cost of living crisis.
For months, inflation came in higher than expected. Now it’s come in lower than expected.
At this point you could be forgiven for asking: what’s the point of economists’ predictions when they always get it wrong? And you would have a point. But at the very least the extent and direction in which they get it wrong gives us a sense of the momentum behind inflation.
Put it all together and this represents what economists would call a “dovish” moment. It implies, all else equal, that central bankers might be less inclined to raise interest rates.
Core inflation, which is closely watched by the Bank as it strips out volatile elements such as food and energy costs, had been expected to be largely unchanged.
However, the ONS reported a steep decline in the core inflation measure from 6.9% to 6.2%.
The shift will be seen as reason for optimism by the Bank’s rate-setters that its 14 consecutive interest rate hikes to date, to cool demand in the economy, are having an effect.
Ahead of the inflation data, the vast majority of economists and financial markets had expected a final hike of 0.25 percentage points to be imposed by the Bank on Thursday.
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The rosier picture for inflation now casts greater doubt on whether an increase is guaranteed, giving some hope to hard-pressed borrowers including mortgage holders who have seen their payments mount during the cost of living crisis to date.
Data provider Refinitiv suggested market participants now saw almost an even chance of Bank rate being kept on hold.
Reduced rate hike expectations were also evident as the pound lost ground against both the dollar and the euro.
ONS chief economist Grant Fitzner said of the latest data: “The rate of inflation eased slightly this month driven by falls in the often-erratic cost of overnight accommodation and air fares, as well as food prices rising by less than the same time last year.
“This was partially offset by an increase in the price of petrol and diesel compared with a steep decline at this time last year, following record prices seen in July 2022.
“Core inflation has slowed this month by more than the headline rate, driven by lower services prices.”
Sir Keir Starmer has condemned plans for pro-Palestine protests two years to the day since the October 7 attacks on Israel, labelling them “un-British”.
Writing in The Times, the prime minister said demonstrations set to take place at several universities today showed a lack of respect for others, claiming previous rallies had been used by some as a “despicable excuse to attack British Jews”.
Adrian Daulby, 53, and Melvin Cravitz, 66, died in the attack at Heaton Park synagogue in Crumpsall on Thursday.
Image: Adrian Daulby (left) and Melvin Cravitz. Pics: Family handout/Facebook
‘A stain on who we are’
Mr Daulby, a member of the congregation, was shot accidentally when police fired on attacker Jihad al Shamie.
The synagogue’s rabbi told Sky News it happened as Mr Daulby “was holding the doors to make sure everyone inside stayed safe”.
The family of Mr Cravitz – a worshipper at the synagogue who police originally stated was a security guard – said he would “do anything to help anyone”.
Sir Keir described the attack as “horrifying”, adding: “This is a stain on who we are, and this country will always stand tall and united against those who wish harm and hatred upon Jewish communities.”
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Synagogue security guard describes moment attack unfolded
Ministers had urged protesters to rethink attending a rally in support of the banned group Palestine Action over the weekend, given its proximity to the synagogue attack.
Image: Pro-Palestine demonstrations in central London have attracted thousands of people. Pic: PA
‘A living nightmare’
Of October 7, the prime minister said it was “the worst attack on the Jewish people since the Holocaust”.
“The brutal, cold-blooded torture and murder of Jews in their own homes.
“And the taking of hostages, including British citizens, some of whom remain in Gaza today.
“Since that awful day, so many have endured a living nightmare. When I spoke with some of the families of the British hostages, I promised them in person that we will not cease in our efforts to bring their loved ones home.”
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PM: ‘We must defeat antisemitism’
PM welcomes Trump’s peace efforts
In his statement, Sir Keir also spoke about the government’s priorities in the Middle East, which he said included releasing the hostages, getting more aid into Gaza, and a ceasefire “that can lead to a lasting and just peace as a step towards a two-state solution”.
Mr Trump’s 20-point peace plan includes the disarmament of Hamas, which would have no role in Gaza’s future governance. The US president would lead an interim administration with the help of Sir Tony Blair, among others.
He has demanded Israel stop bombing Gaza, though airstrikes have continued.
Israel’s war on Hamas has now killed more than 67,000 people in Gaza, most of them civilians, according to the Hamas-run health ministry, which does not differentiate between civilians or combatants.
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‘We’re going to have a Gaza deal’
Antisemitism ‘a terrible scourge’
Conservative leader Kemi Badenoch also criticised pro-Palestine protests in a statement marking the October 7 anniversary, claiming some “turn into hate marches on our streets”.
She said the government’s decision to recognise a Palestinian state “has rewarded the terrorists that perpetrated the October 7 atrocities”.
“Appeasement does not work,” she said, adding: “There are still 48 hostages held captive in Gaza. They must come home now.”
Liberal Democrat leader Sir Ed Davey described antisemitism as a “terrible scourge” and said: “We stand in solidarity with British Jews, the people of Israel and Jewish communities around the world against terrorism, and against antisemitism in all its forms.”
Of the peace talks, he added: “We desperately hope that they will finally see the hostages returned home to their families, a lasting bilateral ceasefire, Hamas out of power in Gaza for good – and set us on the path to a two-state solution that offers both Israelis and Palestinians the peace and security they deserve.”
The Metropolitan Police have arrested 46 people after disrupting a criminal network suspected of smuggling up to 40,000 stolen phones from the UK to China.
A months-long investigation began last December when a box on its way to Hong Kong was found at a warehouse near Heathrow Airport containing around 1,000 iPhones.
Officers discovered almost all of the phones had been stolen, the force said. It then launched Operation Echosteep, bringing in specialist detectives to track down the suspects.
They intercepted further shipments and used forensics to identify two men in their 30s, who were arrested on suspicion of handling stolen goods on 23 September. They have since been charged and remanded in custody.
Image: The discovery of the phones at a warehouse near Heathrow Airport. Pic: Metropolitan Police
A number of phones were found in the men’s car and around 2,000 more devices were found at properties linked to them, the Met Police said.
Detective Inspector Mark Gavin, the senior investigating officer for Operation Echosteep, said: “This group specifically targeted Apple products because of their profitability overseas.
“We discovered street thieves were being paid up to £300 per handset and uncovered evidence of devices being sold for up to $5,000 (£3,700) in China.”
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Image: Phones piled on the backseat of the suspects’ car. Pic: Metropolitan Police
Police call on phone manufacturers to do more
Commander Andrew Featherstone, the Met’s lead for tackling phone theft, has described the operation as “the largest crackdown on mobile phone theft and robbery in the UK”.
He continued: “We’ve shown how serious we are about tackling this issue, but we need more help from the industry.
“We’re calling on phone manufacturers such as Apple and Samsung to do more to support us and protect their customers – especially around phone security and re-use.”
A total of 46 people have been arrested during two weeks of what the force has described as “targeted and precise activity”.
These include the arrests of 11 people during an operation targeting gangs robbing courier vans delivering the new iPhone 17 and the arrest of two men in their 30s – on suspicion of money laundering and handling stolen goods – after officers recovered almost £40,000 in cash at a phone shop in north London.
Another man was charged with handling stolen goods after being stopped with 10 suspected stolen phones at Heathrow Airport on 20 September.
Further enquiries revealed the man – who also had two iPads, two laptops and two Rolex watches – had travelled between London and Algeria more than 200 times in two years, the force said.
London mayor Sadiq Khan said it is “simply too easy and profitable” for criminals “making millions by repurposing stolen phones and selling them abroad”.
“I will continue to call on the mobile phone industry to go harder and faster in designing out this crime by making stolen devices unusable,” he said. “We need coordinated global action to shut down this trade and build a safer London for everyone.”
The synagogue killer, Jihad al Shamie, radicalised himself after searching online for videos of the Islamic State terror group, according to a friend.
The man, Qas, said al Shamie “started using [encrypted messaging app] Telegram and searching for ISIS videos.
“Once, he even tried to show me one at the shisha lounge. I told him to go away and asked how he even got access to that content, and he said it was through Telegram. After that, I didn’t see him for a long time until I heard what had happened.”
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1:43
Who was the Manchester synagogue attacker?
Another friend, Asim, told Sky News he met al Shamie through their shared interest in computers. He said he noticed a difference in al Shamie a year ago.
Asim said al Shamie “changed a bit, I felt his thoughts were a bit too radical for me. He was a nice guy, very quiet and softly-spoken. I was shocked about what he did.
“He started asking me for money – not small amounts, but thousands,” Asim explained.
“When I refused, he became angry. I’d never seen that side of him before.”
Earlier this year, al Shamie was working as a call handler for the RAC motoring organisation.
He was employed through an agency as a part-time temp from December to the end of March, when he was no longer needed.
Last year, al Shamie had money problems and was subject to a government debt relief order, which meant that his debts would be paid off in a year if he agreed to certain restrictions.
Money appeared to be one of many problems.
A former friend of al Shamie described how he became increasingly withdrawn and “in his own world” after a steroid addiction had led to heavier drug use. They said his behaviour became strange and unpredictable.
“I once noticed on his phone that he had several notifications from dating apps, which confused me because I knew he was married,” the friend said.
“You could be having a normal conversation with him, and suddenly he would flip and start ranting. I eventually blocked him.”
Image: Police and forensics officers near Heaton Park Hebrew synagogue. Pic: PA
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Synagogue security guard on moment attack unfolded
Multiple marriages and ‘obsessed’ with dating app
It’s believed the terrorist married several wives in Islamic wedding ceremonies, one of them even before he split up from the mother of his young child.
He reportedly became obsessed with an Islamic dating app, and sent abusive messages to an ex-girlfriend, hit her and told her to dress more conservatively during their brief on-off relationship.
The woman, who was 18 at the time, told the Manchester Evening News: “He used to say ‘I want you to be dedicated to the cause’, and he used to sit there and make me watch videos, like extreme videos, that I had no interest in.
“I am Muslim and of course I love to learn more, but this stuff were things that I have been raised to not agree with. He used to always say I was taught the wrong way and I wasn’t taught right. He was basically just trying to groom me into what he thought.”
She said he would message girls on his Muzmatch – now Muzz – dating app, using false names such as Valentino and Ahmed.
“He kept getting banned because of his speech and what he was sending,” she said.
“There were times when he would send me videos of him with other girls, and the girls were quite young.”
‘Rape fantasies’
The woman said al Shamie told her he had “rape fantasies”, and that he “used to say weird stuff, it was just insane. I can’t believe I stayed as long as I did”.
His marriage collapsed after he secretly wed an NHS nurse, a widow, who had converted to Islam.
A neighbour, Geoff Halliwell, who cleaned the family’s windows for many years at their home in Prestwich, told Sky News al Shamie had lived there with his wife and young child, but he believed left six months earlier.
Mr Halliwell said: “There was the mother and three lads, but one moved away. We’re talking about the eldest, he had a wife and kid, but she moved out some time ago.
“There was no sign of radicalisation, nothing like that. We never talked politics. Just ‘good morning, how are you? Lovely day, isn’t it?’
“He was fine, the whole thing has come out of the blue. He was a smashing lad to talk to, so were the other two lads.”
Mr Halliwell said the father left the family home about 10 years ago, but sometimes visited.
He thought he had moved to France because sometimes he turned up in a French-registered car.
Faraj al Shamie, a trauma surgeon who has worked for the International Committee of the Red Cross in Africa, condemned his son’s attack on the synagogue.
Image: Faraj al Shamie spoke of the family’s ‘deep shock and sorrow’ at his son’s actions
He said in a statement: “The al Shamie family in the UK and abroad strongly condemns this heinous act, which targeted peaceful, innocent civilians. We fully distance ourselves from this attack and express our deep shock and sorrow over what has happened.”
But, two years ago, on 7 October, he praised the actions of Hamas terrorists for their attack on Israel in which 1,200 were killed and 251 taken back to Gaza as hostages.
Al Shamie wrote on Facebook: “The scenes broadcast by the Al-Aqsa Martyrs Brigades of a group of fighters storming an Israeli army camp using simple means, namely balloons and motorcycles, prove beyond a shadow of a doubt that Israel will not remain.”
Additional reporting by Shakir Ahmed, specialist producer and Rebecca Spencer, crime producer