UK inflation rate soared to near-decade high in Oct

London. (Asian independent)┬áThe UK’s Consumer Prices Index (CPI) soared by 4.2 per cent in the 12 months to October, hitting the highest pace since November 2011, the Office for National Statistics (ONS) said.

October’s 4.2 per cent of annual growth rate, up from the 3.1 per cent rise recorded in the year to September, is more than double the Bank of England (BoE)’s 2 per cent target for inflations, reports Xinhua news agency citing the ons AS SAYING.

Meanwhile, the CPI including owner occupiers’ housing costs (CPIH) 12-month inflation rate rose by 3.8 per cent in the 12 months to October 2021, up from 2.9 per cent in the year to September, said the ONS.

The largest upward contribution to the CPIH 12-month inflation rate came from housing and household services, driven significantly by the price rises of electricity, gas and other fuels, said the ONS.

“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,” said Grant Fitzner, chief economist at the ONS.

“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,” Fitzner said.

Analysts said the surge of inflation rate suggested that the possibility of the central bank raising interest rates in December increased.

Earlier this month, the BoE announced its decision to keep interest rates unchanged at 0.1 per cent despite widespread speculation that it will raise rates to contain rising inflation.

The BoE made two emergency cuts of base rate from 0.75 per cent to 0.1 per cent to support businesses and households since the Covid-19 pandemic began.