Inflation in October saw a significant rise, impacting various sectors.
- The Consumer Prices Index (CPI) climbed from 1.7% to 2.3% due to energy price hikes.
- The inflation rate has exceeded the Bank of England’s target, reaching levels not seen since May.
- Housing and household services contributed most to the surge, with electricity and gas prices being key factors.
- Despite rising transport costs, recreation and cultural prices offered a slight reprieve.
The Consumer Prices Index (CPI) rose notably from 1.7% in September to 2.3% in October, largely influenced by increasing energy costs. This uptick in inflation marks the highest level since May, pulling the rate above the Bank of England’s target once again.
Energy price increases played a crucial role in this inflation adjustment, as reflected in the monthly CPI rise of 0.6% from October last year. The Office for National Statistics (ONS) highlighted that housing and household services, predominantly electricity and gas prices, were the primary contributors to this change.
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) also witnessed an increase, climbing to 3.2% in the year leading up to October, compared to 2.6% previously. This is indicative of the broader impact of rising energy prices past the immediate consumer market.
While energy prices surged, transport costs experienced a 2.0% drop over the past year, offering some balance to consumer expenditures. This decrease was less severe than the 2.4% fall noted in September, with a slight monthly increase of 0.1% this October compared to a decrease last year.
Comments from the ONS chief economist, Grant Fitzner, shed light on the nuances of these statistics. He noted that the inflation hike stemmed primarily from higher energy price caps, which elevated gas and electricity costs, juxtaposed against a year-on-year drop. Meanwhile, drops in recreation and culture expenses, specifically in areas like live music and theater, partially countered the overall inflationary pressures.
The economic landscape in October was markedly influenced by rising energy prices, contributing to an above-target inflation rate.
