United Kingdom: Inflation comes in at highest level in over four decades October
November 16, 2022
Inflation came in at 11.1% in October, up from September’s 10.1% and above market expectations. October's result represented the highest inflation rate since 1981. The reading was driven largely by higher regulated energy prices, as Ofgem’s energy price cap rose by 25% from September to October.
Annual average inflation rose to 8.2% in October (September: 7.6%). Meanwhile, core inflation was stable at 6.5%.
Finally, consumer prices rose 1.97% in October over the previous month, picking up from September's 0.50% rise. October's jump marked the highest reading since April.
On the implications of the reading for monetary policy, analysts at Nomura said:
“The outsized rise in CPI inflation and strong momentum in core prices, alongside evidence […] of a tight labour market, supports our view of the Bank of England making another bold move in December. We are looking for a 75bp hike.”