Gas and electricity prices pushed the UK’s inflation to 11.1 percent in October, the highest in 41 years, official figures show.
The Office for National Statistics’s (ONS) latest inflation figures, published on Wednesday, showed a 2 percent monthly increase in the Consumer Prices Index (CPI) in October.
The CPI inflation in the 12 months to October rose by 11.1 percent, up from 10.1 percent in September.
Inflation including occupiers’ housing costs rose by 9.6 percent in the 12 months to October.
The ONS said gas and electricity prices were the largest factors in pushing up both figures.
The average house energy bill was previously expected to jump by 80 percent in October. The government’s Energy Price Guarantee scheme absorbed around two-thirds of the rise, but households and businesses still saw an increase in their energy bills.
Increases in the prices of food, non-alcoholic beverages, and transport are also large contributors to the inflation.
Food and non-alcoholic beverages saw a 16.4 percent jump in the 12 months to October, up from 14.6 percent in September.
But the annual inflation rate for transport came down in October to 9.3 percent, compared to 10.9 percent in September.
Chancellor of the Exchequer Jeremy Hunt blamed the inflation on the aftershock of the COVID-19 pandemic and Russia’s invasion of Ukraine, saying it’s the government’s duty to help the Bank of England (BoE) rein in inflation.
“That requires some tough but necessary decisions on tax and spending to help balance the books,” he said.
“We cannot have long-term, sustainable growth with high inflation. Tomorrow I will set out a plan to get debt falling, deliver stability, and drive down inflation while protecting the most vulnerable.”
Labour’s shadow chancellor Rachel Reeves said the UK’s high inflation resulted from “12 years of Tory economic failure” that has “left us exposed to any shocks,” warning, “The potent mix of high inflation and low growth is trapping us in a vicious cycle of stagnation.”
Earlier in November, the BoE raised its base interest rate to 3 percent in a bid to control runaway inflation. The bank also forecast a two-year recession, the longest since records began in the 1920s.
BoE Chief Economist Huw Pill on Nov. 8 told peers at a Economic Affairs Committee hearing that he believes external factors that pushed up oil prices contributed to around half of the inflation seen in September.
Pill said the BoE’s £450 billion ($536 billion) quantitative easing during the pandemic may have been a contributing factor in the rest of the inflation along with global governments’ fiscal policies.
Pill hinted that there will be more interest rate hikes to come, saying a recent market forecast for the rate to reach 5.25 percent next year is “probably overly restrictive.”
From The Epoch Times
