New data shows that inflation pressure in the UK is strengthening.
“All items” inflation was +4.2% annually, in October 2021, as measured by the CPI method.
This is a large increase on +3.1% in September with transport costs and utilities making major contributions as changes in wholesale fuel markets feed through to households.
Geo-political pressures continue to drive price change in gas markets especially, suggesting that this inflation element will continue to impact consumers in months ahead.
Inflation is now the highest it has been for at least a decade but this is not a surprise - it has been anticipated for some time.
Recent official forecasts indicate that this trend has further to run: OBR suggests that inflation will peak at about 4.4% in Q2 2022, whilst the Bank of England suggests +4.8% in Q2 2022. If this view is correct, then current increases in average pay may be quickly eroded by inflation effects.
Food price inflation in October was +1.2% annually, the third successive month of strengthening inflation.
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