London: Consumer prices in the United Kingdom surged at the fastest rate in nearly a decade in October amid soaring energy costs, official figures showed Wednesday, a development that has cemented market expectations that the Bank of England will raise interest rates next month.
The Office for National Statistics said inflation accelerated to 4.2 per cent in the 12 months through October, from 3.1 per cent the previous month.
The bigger-than-expected increase pushed inflation to its highest level since November 2011 and means most people will be enduring a drop in living standards in the run-up to Christmas as household incomes get stretched.
Because inflation is running at more than double the Bank of England’s target rate of 2 per cent, the central bank is under pressure to raise interest rates to try to curb the price surges by cooling the economy.
It had been widely expected to become the first central bank among the leading industrial nations to raise interest rates earlier this month but held off because of some unease about the outlook for unemployment.