UK inflation hits 41-year excessive of 11.1% as meals and power costs proceed to soar

LONDON — U.Okay. inflation jumped to a 41-year excessive of 11.1% in October, exceeding expectations as meals, transport and power costs continued to squeeze households and companies.

Economists polled by Reuters had projected an annual improve within the shopper worth index of 10.7%, and October’s print marks a rise from the 40-year excessive of 10.1% seen in September.

Regardless of the introduction of the federal government’s Vitality Value Assure scheme, the Workplace for Nationwide Statistics mentioned the most important upward contributions got here from electrical energy, fuel and different fuels.

“Indicative modelled shopper worth inflation estimates recommend that the CPI fee would have final been larger in October 1981, the place the estimate for the annual inflation fee was 11.2%,” the ONS mentioned.

On a month-to-month foundation, the CPI rose 2% in October, matching the annual CPI inflation fee between July 2020 and 2021.

General, the price of housing and family providers, which incorporates power payments, rose by an all-time excessive of 11.7% within the 12 months to October 2022, up from 9.3% in September 2022.

“In October 2022, households are paying, on common, 88.9% extra for his or her electrical energy, fuel, and different fuels than they have been paying a yr in the past,” the ONS mentioned.

“Home fuel costs have seen the most important improve, with costs in October 2022 being greater than double the value a yr earlier.”

Meals and non-alcoholic drinks additionally contributed closely, rising by 16.4% within the 12 months to October to notch its highest annual fee since September 1977.

The nation faces its longest recession on file, in accordance with the Financial institution of England, whereas the federal government and central financial institution try to coordinate the tightening of fiscal and financial coverage so as to rein in inflation.

The Financial institution raised rates of interest by 75 foundation factors earlier this month, its largest hike in 33 years, to take the Financial institution Charge to three%, however challenged the market’s pricing of future fee will increase.

Finance Minister Jeremy Hunt will ship a brand new fiscal assertion on Thursday and is anticipated to announce substantial tax hikes and spending cuts in a bid to plug a £50 billion-plus gap within the nation’s public funds.

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