UK inflation accelerates sharply to 2.3% in October

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UK inflation accelerated sharply to 2.3 per cent in October, as higher energy costs pushed price growth above the Bank of England’s target.

The annual consumer price index figure from the Office for National Statistics was up from 1.7 per cent in September and above the expectations of analysts surveyed by Reuters of 2.2 per cent.

Price pressures have been expected to rise after a 10 per cent increase last month in Britain’s energy price cap, which governs millions of households’ gas and electricity bills.

October’s inflation figure complicates the BoE’s deliberations over when to cut rates. The bank has repeatedly signalled it will pursue a “gradual” approach as it seeks to meet its 2 per cent inflation target.

Earlier this month, it cut borrowing costs by a quarter-point to 4.75 per cent, but signalled that a further move was unlikely before 2025.

Core inflation was 3.3 per cent, higher than economists’ expectations of 3.1 per cent, and up from 3.2 per cent in September. The rate of services inflation was 5 per cent, above expectations of 4.9 per cent.

The pound rose following the release of the figures, climbing 0.2 per cent to $1.271.

Services inflation is seen by the central bank as a key gauge of underlying price pressure. Last month, Andrew Bailey, the BoE governor, said that rate-setters were keen to see inflation in the services sector come down further.