UK annual inflation soars to 4.2% on energy bills: data
The annual rate jumped to 4.2 percent, hitting the highest level since November 2011
LONDON (AFP) - British annual inflation surged close to a ten-year peak in October partly on the back of higher household energy costs, official data showed Wednesday.
The annual rate jumped to 4.2 percent, hitting the highest level since November 2011, the Office for National Statistics said in a statement.
That followed 3.1 percent in September, and was more than double the Bank of England’s official 2.0-percent target -- sparking fresh talk of an interest rate hike after Tuesday’s strong unemployment data.
"Inflation rose steeply in October to its highest rate in nearly a decade," ONS chief economist Grant Fitzner.
"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."
Central banks use interest rate hikes to try and dampen high inflation, which is weighing on companies and consumers globally.
As countries emerge and reopen from pandemic lockdowns, companies are struggling to meet demand for goods and services, sending inflation soaring.
The BoE earlier this month kept its key interest rate at a record-low 0.1 percent, but signalled a probable hike in the coming months to dampen soaring UK inflation.
Markets had however expected the BoE to raise its main rate for the first time in more than three years.
The BoE stance contrasts with other central banks around the world, including the US Federal Reserve, that are tightening monetary policy as growth recovers and inflation spikes.
"Today’s inflation data will reinforce the Bank of England’s resolve to act," said KPMG UK economist Yael Selfin.
"While not unexpected, confirmation that inflation is moving further away from its 2.0-percent target may seal the Bank of England’s resolve to raise rates in December, following the strong labour data released this week."
