Inflation highest for nearly a decade
By Richard Wright | 17th November 2021
Inflation has hit its highest level for almost a decade, with fuel and energy price rises leading the way.
The Office for National Statistics (ONS) says that consumer prices index rose to 4.2% in October, from 3.1% in September.
It's a bigger increase than expected and has increased speculation about an imminent rise in interest rates.
The 12% rise in the energy price cap is seen as the main driver of the increase.
Grant Fitzner, ONS chief economist, said: "Inflation rose steeply in October to its highest rate in nearly a decade. 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 ten years."
Suren Thiru, head of economics for the British Chambers of Commerce, said: "The latest data confirms that inflation is on a significant upward trajectory.
"A substantial winter surge in inflation remains probable with the rising cost of imported raw materials and higher energy prices likely to lift inflation to around 5% next year."
But he added that 'raising interest rates too early should be resisted to avoid damaging business and consumer confidence'.
However, Kitty Ussher, chief economist at the Institute of Directors, said: "At this point in time firms are far more worried about underlying inflation than the rising cost of debt.
"With interest rates at historic lows, we're calling on the Bank of England to show it means business and get inflation expectations back in line with their mandate."
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