U.K. consumer price inflation rose by 11.1 percent in the 12 months to October, reaching its highest point in 40 years, according to data released Wednesday by the Office for National Statistics (ONS).
Inflation went up from, 10.1 percent in September, after dropping to single-digit numbers in August.
“Rising gas and electricity prices drove headline inflation … despite the Energy Price Guarantee,” said Grant Fitzner, the ONS chief economist, in a statement. Rising food prices also contributed to the upward trend. Sinking prices for transport (principally motor fuels and second-hand car prices) made the largest downward contribution to the change in the rates.
The ONS said the Consumer Price Index, including owner occupiers’ housing costs, rose by 9.6 percent in the 12 months to October, up from 8.8 percent in September.
Inflation has been spiking across Europe and the U.S., in large part as a result of Russia’s war on Ukraine.
The Bank of England projects inflation to accelerate to 13 percent in the final quarter this year and remain at very elevated levels throughout much of 2023 before falling to the 2 percent target in 2024.
Chancellor Jeremy Hunt said: “It is our duty to help the Bank of England in their mission to return inflation to target by acting responsibly with the nation’s finances. That requires some tough but necessary decisions on tax and spending to help balance the books.”
Hunt is set to announce more tax and spending cuts in his so-called Autumn statement on Thursday, reversing most of the policies of his predecessor Kwasi Kwarteng.
“We feel the potent impact of low growth & high inflation so harshly in Britain because 12 years of Tory economic failure have left us exposed,” Shadow Chancellor Rachel Reeves said in a tweet.