UK inflation has risen to its highest level since April driven by an increase in household energy bills, according to official figures.
The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation rose to 2.3% for October, from 1.7% in the previous month.
This marks the sharpest month-on-month rise in the inflation rate in two years. It also exceeded expectations, as economists had forecast a reading of 2.2% for the month.
Grant Fitzner, chief economist at the Office of National Statistics (ONS) said: “Inflation rose this month as the increase in the energy price cap meant higher costs for gas and electricity, compared with a fall this time last year.
“These were partially offset by falls in recreation and culture, including live music and theatre ticket prices.”
However, he noted: “The cost of raw materials for businesses continued to fall, once again driven by lower crude oil prices.”
The cost of raw materials fell 2.3% in the year to October, down from a revised decrease of 1.9% in the year to September. Meanwhile, factory gate prices fell 0.8%, down from a revised drop of 0.6%.
Treasury Chief Secretary Darren Jones acknowledged there was “more to do” to ease cost-of-living pressure as inflation increased in the year to October.
Mr Jones said: “We know that families across Britain are still struggling with the cost of living. That is why the Budget last month focused on fixing the foundation of our economy so we can deliver change.That includes boosting the national minimum wage, freezing fuel duty and protecting working people’s payslips from higher taxes.
“But we know there is more to do. That is why the Government is focused on economic growth and investment so we can make every part of the country better off.”
Today’s data represents the first set of inflation statistics since Chancellor Rachel Reeves’s Autumn Budget, which introduced plans for a series of tax increases.
Shadow chancellor Mel Stride warned the impact of the Budget would only push inflation up higher. He said: “Having brought inflation back down to target, we know how important it is for all of us that the Government does the same.
“What is worrying about today’s announcement is that inflation is running ahead of expectations and official forecasts state these figures are not expected to improve. Labour’s Budget will push up inflation and mortgage rates.”
Scott Douglas, capital markets director at international corporate finance firm Centrus, commented: “Despite the recent interest rate cut and the downward trajectory of inflation, a number of potentially inflationary forces have been unleashed.”
“Factors from the recent Autumn Budget such as National Insurance Contribution hikes, Trump’s election win and the potential rise in import costs stemming from tariffs coupled with the strengthening of the US Dollar could all have a significant impact. Ongoing conflict in the Middle East and the recent escalation between Russia and Ukraine has caused geopolitical risk to return to the energy markets, and the prospect of further energy price rises will drive inflation upwards – despite falling wage growth figures.”
“As well as heightened inflation, markets are now expecting interest rates to remain higher for longer – meaning we could be staring down the barrel of an economic groundhog day.”
Alastair Douglas, CEO at TotallyMoney added: “While it’s hardly been a nightmare before Christmas, it’s not been a dream start for the new government. Since the Autumn Budget, we’ve heard that unemployment, mortgage rates, and repossessions are creeping up. We’re now waiting to be told that energy bills will increase again in January, while retailers are warning that tax hikes will further drive inflation and job losses.
“Following five turbulent years, people need stability and hope, but they say bad luck comes in threes. Whatever the case, the Prime Minister and his cabinet need to show that what they’re doing is having a positive impact — and that there’s light at the end of this long, dark tunnel.”
We’ll be bringing you the very latest updates, pictures and video on this breaking news story.
For the latest news and breaking news visit:** **/finance
Stay up to date with all the big headlines, pictures, analysis, opinion and video on the stories that matter to you.
Follow our social media accounts here onhttp://facebook.com/DailyExpress and @daily_express
