Inflation Falls Again in Q3

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Q3 '14 Inflation: 1.4%

Average Prediction: 2.5%

Number of Correct Forecasts: 0/419

Current S&P 500 High: 2011 (18th September)

Competition Progress: 85.2% complete

The inflation rate fell to 1.2% in September, its lowest level in five years, and this dragged the quarterly average down to 1.4% (after rates of 1.6% and 1.5% in June and July respectively).  That means that the inflation rate has now been below its target of 2% for nine straight months.  Back in July, when we were facing slowly rising inflation, it looked as if the Monetary Policy Committee might finally be able to raise interest rates, but that looks very unlikely given the latest figures.

The quarterly figure of 1.4% was well below our average forecast made at the end of last year, and not a single one of our 419 entries correctly predicted the rate of inflation for last quarter.  Two people came close with 1.5%, and only ten people thought it would be lower than that figure.  The vast majority - 87% - predicted that inflation would be higher than the 2% target at this stage of the year (although this was down compared to the 95% that thought it would be higher than 2% in Q1 and Q2).

In our official competition, Ros Altmann continues to be the closest of the three titans on the inflation rate, although her prediction of 2% was not that close.  However, it looks like a case of too little too late, and barring any major revisions in the GDP numbers (which can't be discounted at the moment), Kevin Daly's lead of 19 points looks unassailable.

Click here for a summary of the results so far, or here for the full standings.