Economy

UK inflation hits 10-year high, bolstering rate hike bets

Bank of England to consider rate hike next month

A pedestrian passes an entrance at the Bank of England in the City of London. Photographer: Chris J. Ratcliffe/Bloomberg

Wed Nov 17 2021 - 07:41

UK inflation has jumped to a near-decade high as soaring energy and fuel prices pushed up the cost of living, according to official figures. The Office for National Statistics (ONS) said the rate of Consumer Prices Index (CPI) inflation rose sharply from 3.1 per cent in September to 4.2 per cent last month — the highest level since December 2011.

It comes after gas and electricity prices have surged, with regulator Ofgem last month increasing the energy price cap by 12 per ccent.

Prices on forecourts have also raced higher, with the fuel shortage in late September and early October sending petrol and diesel spiking higher amid wider ongoing rises in the global cost of oil. The ONS said average petrol prices hit their highest since September 2012, at 138.6 pence per litre in October compared with 113.2 pence per litre a year earlier. Grant Fitzner, chief economist at the ONS, said: "Inflation rose steeply in October to its highest rate in nearly a decade. "This was driven by increased household energy bills due to the price cap hike, a rise in the cost of second-hand cars and fuel as well as higher prices in restaurants and hotels.

“Costs of goods produced by factories and the price of raw materials have also risen substantially and are now at their highest rates for at least 10 years.”

READ MORE

The Bank of England warned earlier this month that inflation will rocket to its highest level for 10 years. It is forecasting CPI will reach 4.5 per cent in November and hit around 5 per cent next April, the highest level since 2011. - Reuters

LATEST STORIES