By Jason Douglas

LONDON--Annual inflation in the U.K. cooled in September but nevertheless remained above the Bank of England's 2% annual goal, keeping alive the prospect of gentle interest rate increases in the next couple of years.

Consumer price growth slowed to an annual 2.4% in September from 2.7% a month earlier, the Office for National Statistics said Wednesday. The slowdown was driven by an on-month decline in prices for food and airfares, the agency said.

Inflation is stirring across the developed world as the global economy enjoys a spell of strong growth, prompting major central banks to gradually tip-toe back from the easy-money policies they have pursued for more than a decade.

British consumers have been grappling with high inflation since early 2017, after a 2016 vote to leave the European Union hit the value of the pound, pushing up the price of imports.

Consumer-price inflation has now been running in excess of the BOE's 2% target for 20 months and the central bank has telegraphed that it expects to nudge up borrowing costs two or more times in the next two years to steer inflation back to target.

Signs of inflationary pressures persist despite the slowdown in headline inflation last month. Wage growth picked up to its fastest annual pace in almost 10 years in the three months through August, while Wednesday's data showed companies' raw-material costs accelerated by more than 10% on year in September due to rising oil prices.

Prices charged by companies at factory gate also rose. Output prices were 3.1% higher last month than a year earlier, which compares with an annual rise of 2.9% in August, the ONS said. The pickup was driven in part by a heatwave in the U.K., which pushed up prices for wheat and animal feed.

Write to Jason Douglas at jason.douglas@wsj.com

(END) Dow Jones Newswires

October 17, 2018 04:51 ET (08:51 GMT)