Inflation hits highest level in a decade amid soaring energy costs

17 November 2021, 07:10 | Updated: 17 November 2021, 07:40

Inflation has reached its highest level in almost a decade as fuel and energy costs continue to surge and push up the cost of living, according to data from the Office of National Statistics (ONS).

The ONS said the rate of Consumer Price Index inflation increased to 4.2 per cent in October, from 3.1 per cent in September.

Grant Fitzner, chief economist at the ONS, said: "Inflation rose steeply in October to its highest rate in nearly a decade.

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"This was driven by increased household energy bills due to the price cap hike, a rise in the cost of second-hand cars and fuel as well as higher prices in restaurants and hotels.

"Costs of goods produced by factories and the price of raw materials have also risen substantially and are now at their highest rates for at least 10 years."

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Chancellor Rishi Sunak said the inflation increase was not just limited to the UK, and said the Government was working to support those affected.

"Many countries are experiencing higher inflation as we recover from Covid and we know people are facing pressures with the cost of living, which is why we are taking action worth more than £4.2 billion to help them," said Mr Sunak.

"We're helping people get into work, progress and keep more of what they earn, through our Plan for Jobs and by effectively cutting taxes for workers receiving Universal Credit.

"We are also providing more immediate support, including through the £500 million Household Support Fund for the most vulnerable families, fuel and alcohol duty freezes, and the energy price cap."

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Gas and electricity prices have surged in recent months, with regulator Ofgem increasing the energy price cap by 12 per cent last month.

Petrol costs have also jumped recently, sparked by a fuel shortage in late September and early October and wider ongoing rises in the global cost of oil.

The ONS said average petrol prices hit their highest since September 2012, at 138.6p per litre in October.

A year earlier it was 113.2p per litre.

The Bank of England previously warned that inflation would hit a 10-year high, and it is forecasting CPI will reach 4.5 per cent in November and around 5 per cent in April.

This story is being updated.