* UK inflation hits 1.0 pct in Sept, highest since late 2014
* Statisticians see little evidence that rise due to weak
* Economists see Sept jump as start of broader increase in
* Figures likely to further dampen expectations of BoE rate
(Recasts, adds detail, quotes)
By Andy Bruce and David Milliken
LONDON, Oct 18 British inflation recorded its
biggest jump in two years last month, setting the tone for a
steep rise in prices over the coming year as sterling's
post-Brexit plunge squeezes household finances.
Annual consumer price inflation rose to 1.0 percent in
September from 0.6 percent in August - a leap not seen since
June 2014, official figures showed on Tuesday. The rate of
inflation was its highest since November that year.
There was no direct evidence that sterling's near 20 percent
slide against the U.S. dollar since the referendum decision to
leave the European Union was the driver of September's price
jump, the Office for National Statistics said.
But economists said it would be a growing factor in the
months ahead as the weaker pound pushes up the cost of imports.
"With wage growth more or less steady, the rise in inflation
over the last year has already taken about a percentage point
off real income growth," HSBC economist Liz Martins said.
More price rises will eat into the spending power of
consumers who have so far proven resilient to the Brexit shock.
The Resolution Foundation think tank warned that Britons
were likely to suffer a return to falling wages in real terms,
something which blighted the economy in the years following the
financial crisis until late 2014.
Sterling rose briefly against the dollar and British
government bond prices fell after the stronger-than-expected
figures which will further dampen expectations that the Bank of
England will cut interest rates again this year.
Governor Mark Carney last week said the BoE could tolerate
"a bit" of an overshoot against its 2 percent inflation target,
to help accommodate economic growth and employment.
INFLATION WARNING SIGNS
The BoE said in August that inflation would hit its 2
percent target in around a year and then overshoot it for the
next couple of years.
Many economists now expect sterling's latest fall could push
inflation to around 3 percent and that, combined with signs that
the economy did not suffer an immediate Brexit slump, is likely
to put the BoE off a further rate cut this year. As recently as
last month, the BoE said a rate cut was still likely.
"The bigger-than-expected drop in sterling has done a lot of
the work for the Bank of England," said Berenberg Bank economist
Kallum Pickering, adding that he only expected a rate cut if
economic conditions deteriorate.
Most of the rise in inflation in September was due to the
biggest monthly jump in clothing prices since 2010 and a rise in
fuel costs, which had been falling a year earlier.
A pricing row last week between Britain's biggest retailer,
Tesco, and consumer goods giant Unilever gave
consumers a sign of how Brexit is likely to impact them, with
suppliers and stockists battling for profit margins.
An ONS measure of inflation stripping out the prices of
energy, food, alcohol and tobacco rose to 1.5 percent from 1.3
percent, above economists' expectations for 1.4 percent.
Factory gate prices increased by a stronger-than-expected
1.2 percent, the biggest increase in three years.
(Editing by Alison Williams and Hugh Lawson)