CPI in unexpected rise to 3.2pc
The UK Consumer Prices Index (CPI) inflation rate rose to a four-month high of 3.2 per cent in October, according to official figures.
Analysts had expected the CPI figure to remain the same at 3.1 per cent.
Meanwhile, Retail Prices Index (RPI) inflation fell slightly to 4.5 per cent, down from 4.6 per cent a month earlier, the data from the Office for National Statistics (ONS) showed.
RPI differs from CPI in that it includes a bigger share of housing costs.
The news means the Bank of England continues to be posed with a policy dilemma.
CPI inflation remained more than one percentage point above the Bank’s two per cent target, so that Bank of England will be forced to write yet another letter to the chancellor to explain why.
David Kern, Chief Economist at the British Chambers of Commerce (BCC) said: “The slight increase in inflation was mildly disappointing, but broadly in line with the forecast published in the Bank of England’s Inflation Report.
“The available evidence still supports the Bank’s assessment that after a temporary increase, inflation will come down significantly over the next 12-18 months.
“Inflationary expectations remain under control and wage increases are modest. The threat of a major setback to growth remains much greater than the risk of a surge in inflation, and pressures facing businesses and individuals are likely to increase over the next year.”