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UK inflation in September remained at its lowest level since late 2016, according to official data, providing continued support to consumer spending power as Brexit uncertainty clouds the economic outlook. Prices were 1.7 per cent higher than during the same period last year, the same as in August, the Office for National Statistics said on Wednesday. Separate figures it released showed house price growth increased slightly after flatlining for several months. The consumer price index, which includes owner occupiers’ housing costs, had dropped in August from 2.1 per cent in July to its lowest level since December 2016, driven by price decreases in the volatile computer games market. The Bank of England’s target is 2 per cent. “Motor fuel and second-hand car prices fell, but were offset by price increases for furniture, household appliances and hotel rooms,” said Mike Hardie, ONS head of inflation. Core inflation, which excludes food, energy and alcohol, increased from 1.5 per cent to 1.7 per cent Growth in average UK house prices jumped to 1.3 per cent in the year to August compared with 0.8 per cent in the year to July. Falling prices in the south and south-east of England have driven a slowdown in house price growth over the past three years. The latest increase was despite prices in London falling 1.4 per cent in the year to August. “The housing market is starting to regain some poise,” said Samuel Tombs, chief UK economist at consultancy Pantheon Economics. He added that lower mortgage rates had probably helped by improving the affordability of homes. Howard Archer, chief economist at EY Item Club, said the latest inflation figures showed consumer purchasing power was “at a decent level” but warned “the fundamentals for consumers may have peaked” following signs of faltering employment growth. Brexit Briefing Help us steer you through the twists and turns of Britain’s political turmoil, from Monday to Friday. Sign up here The jobs market has remained resilient in the face of prolonged economic uncertainty, but the employment rate unexpectedly dropped in the three months to July, according to ONS figures released on Tuesday, and annual earnings growth also fell. The headline inflation rate matched the forecast of the BoE, which has held back from cutting interest rates this year, and is not likely to put pressure on the central bank to take action. In its August report, the BoE predicted inflation would rise above 2 per cent next year after falling in the last quarter of 2019. But its forecasts are based on an orderly Brexit. In the event of a no-deal departure from the EU it maintains that interest rates could move in either direction, although it has not set out any alternative forecasts. “If the UK leaves the EU without a deal at the end of October, we suspect inflation would be markedly higher and squeeze consumer purchasing power,” Mr Archer said.