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Inflation in the UK has soared to a 10-year high as rising energy bills, fuel costs, second-hand car prices and food hit families and businesses.
Data just released shows that the Consumer Prices Index surged to 4.2% in the 12 months to October, more than double the Bank of England’s inflation target.
This is the highest 12-month inflation rate since November 2011, the Office for National Statistics reports.
That’s up from 3.1% in September, and higher than City economists had expected.
It means the cost of living squeeze has intensified as a tough winter approaches. And it puts more pressure on the Bank of England to consider raising interest rates next month.
In October alone, prices rose by 1.1%.
The “main upward pressure came from electricity, gas and other fuels”, says the ONS, after the UK’s energy cap was lifted in October. That drove up household bills sharply, hitting vulnerable families hard.
The ONS says:
In April 2020, the energy price cap had been reduced causing electricity, gas and other fuels’ contribution to the CPIH headline rate to fall to negative 0.20 percentage points. But this fall was reversed in April 2021 with rises in gas and electricity prices.
The further price rises in October 2021 have compounded the April 2021 increases, resulting in 12-month inflation rates of 18.8% for electricity and 28.1% for gas. These are the highest annual rates for these classes since early 2009.
Rising petrol prices, and the cost of second hand cars, also drove inflation higher.
Average petrol prices were 138.6 pence per litre in October, compared with 113.2 pence per litre a year earlier.
That’s the highest recorded since September 2012, as the jump in crude oil prices fed through the pumps.
Used car prices jumped by 4.6% during October, and have surged by 27.4% since April 2021, as the shortage of semiconductor chips to build new cars pushed up demand.
The ONS adds that “restaurants and hotels, education, furniture and household goods, and food and non-alcoholic beverages” also made large upward contributions to higher inflation.
More details and reaction to follow….
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