UK inflation hits 10-year high

Inflation in Britain hit its highest level in nearly a decade in October after soaring energy prices hit household bills.

The The consumer price index rose to 4.2 percent from a year earlier, the highest since November 2011, and up from 3.1% in September, the Office for National Statistics said on Wednesday. The price increases were more than double the central bank’s 2% target, increasing the likelihood that policymakers will go ahead with the interest rate hikes they signaled.

Rising energy prices, especially wholesale natural gas, which caused nearly two dozen energy providers in Britain to collapse and disrupted manufacturers. The ceiling on energy bills, which protects around 15 million homes, was sharply raised by 12% in October.

Other big contributors were higher prices for gasoline and hotels and restaurants, the statistics agency said.

The Bank of England has said it expects inflation to peak at around 5% in the spring. “This period of higher inflation is likely to be temporary,” central bank governor Andrew Bailey said this month. But there was “no fixed unit of time” that defines the transient, he said.

The central bank said “there will be a need over the next few months” to raise interest rates if economic data turns out as policymakers anticipate, especially if the end of the government holiday program does not did not lead to a sharp increase in unemployment. Within three months until September, unemployment rate was 4.3 percent, 0.2 percentage point lower than in the three months to July, and advance payroll data said only a small number of people lost their jobs in October when the leave program expired.

As the global economy emerged from successive lockdowns over the past year, supply bottlenecks, labor market shortages and other shortages have disrupted supply chains around the world. whole. Policymakers are now warning that supply problems and the resulting higher prices will last longer than they originally anticipated, adding pressure on central bankers to act more aggressively to prevent inflation to get out of hand.

In the United States, the consumer price index jumped to 6.2% in October, the fastest annual increase since 1990, and prices rose 4.1% in the euro area last month, fastest in 13 years. In China, prices paid by wholesalers to producers reached their highest level in 26 years amid rising commodity prices and electricity shortages.