UK inflation hits highest level in a decade

The cost of living has increased at the fastest pace in almost 10 years, new figures show.

The UK’s Consumer Prices Index (CPI) rose by 4.2% in the 12 months to October 2021, up from 3.1% in September, the Office for National Statistics (ONS) said.

This takes inflation to more than double the Bank of England’s target of 2%.

It’s a bigger jump than economists had predicted and adds to the pressure on the central bank to raise interest rates.

The rise in inflation was driven by increased household energy bills, a rise in the cost of second-hand cars and fuel as well as higher prices in restaurants and hotels, according to ONS chief economist Grant Fitzner.

“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,” he added.

The Bank of England said previously that it may raise interest rates in the coming months to tackle rising prices.

Sir John Gieve, a former member of the Bank’s Monetary Policy Committee which sets interest rates, told the BBC’s Today programme that October’s high inflation figures were not “a one-off”.

“The Bank and other forecasters expect it to rise right the way through to April, and then to stay well above target for the rest of the year,” he explained.

Yael?Selfin, chief economist at KPMG UK, said that the latest ONS figures “will reinforce the Bank of England’s resolve to act”.