Inflation in Great Britain rose sharply in October, to the highest level in the last six months, according to data published today by the National Statistics Office.
The bureau said higher energy bills lifted inflation to 2,3 percent in October from a three-year low of 1,7 percent recorded the previous month. Stubbornly high inflation in the service sector, which makes up about 80 percent of the British economy, didn't help either.
The increase, which was above earlier forecasts, pushed inflation above the Bank of England's target rate of 2 percent.
Earlier this month, the bank cut its main interest rate by a quarter of a percentage point to 4,75 percent for the second time in three months after inflation fell to its lowest level since April 2021.
Bank Governor Andrew Bailey has warned that rates will not fall too quickly in the coming months, in part because last month's New Labor government's budget measures are likely to push prices up more than they otherwise would.
In her budget, Economy Secretary Rachel Reeves announced around £70bn of extra spending, funded by tax increases and borrowing. Economists believe that, along with the possibility of businesses mitigating the tax increase by raising prices, could push inflation higher than it otherwise would be.
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