The Office for National Statistics (ONS) said Consumer Prices Index (CPI) that inflation skyrocketed to 2.3% in October from 1.7% the month before, which is the highest level in two years.
UK inflation rose due to an increase in household energy bills which is above the Bank of England’s target of 2% which could see interest rates being held in December.
The average household bill rose in October by £149 after Ofgem raised the energy cap from £1,568 for a typical household in the UK to £1,717 which is around a 10% increase.
ONS chief economist Grant Fitzner said, “Inflation rose this month as the increase in the energy price cap meant higher costs for gas and electricity compared with a fall at the same time last year.
“These were partially offset by falls in recreation and culture, including live music and theatre ticket price.
“The cost of raw materials for businesses continued to fall, once again driven by lower crude oil price.”
Monica George Michail, associate economist at NIESR (National Institute of Economic and Social Research) said, “We forecast annual headline inflation to rise further towards the end of the year as base effects drop out.
“While we think the Bank of England will continue to cut rates in 2025, the pace of rate cuts is expected to be slower than previously anticipated, and rates may stay elevated for longer.”
Treasury Chief Secretary Darren 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.
“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.”
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