Britain’s annual inflation rate unexpectedly surged in October, rising above the Bank of England’s target as households and businesses faced higher energy costs, according to official data released Wednesday.
The Consumer Prices Index (CPI) increased to 2.3% for the 12 months to October, up from a three-year low of 1.7% in September, the Office for National Statistics (ONS) reported.
This marks the first time the CPI has reached 2.3% since April, and it exceeded analysts’ expectations, who had forecasted a rise to 2.2%. The Bank of England’s target inflation rate is 2.0%.
ONS chief economist Grant Fitzner explained that inflation climbed due to higher energy bills, as the increase in the energy price cap led to higher gas and electricity costs compared to the same period last year.
The energy regulator, Ofgem, sets the price cap quarterly, and the latest rise, which took effect in October, was 10%. However, this is expected to decrease significantly in January, based on current forecasts.
Ofgem attributed the rise to escalating prices in international energy markets, driven by geopolitical tensions and extreme weather events that have heightened demand for gas.
