United Kingdom: Inflation comes in at highest level since December 2011 in October
Consumer prices increased 1.09% from the previous month in October, picking up from September’s 0.29% rise. October’s figure marked the highest reading since April 2011. Looking at the details of the release, prices for recreation and culture fell in October. However, prices for transportation rebounded.
Inflation came in at 4.2% in October, up from September’s 3.1% and moving further above the Bank of England’s 2.0% target. October’s reading marked the highest inflation rate since December 2011 and was above market expectations, and was driven by the increase in the energy price cap in the month. Annual average inflation rose to 1.8% in October (September: 1.5%). Finally, core inflation rose to 3.5% in October, from September’s 2.9%.
Inflation is set to be high in the coming months, and a further notable increase in the energy price cap is likely in April 2022 if wholesale gas prices stay at elevated levels.