The inflation rate reached 2.3% in October, marking its highest level since May.
- The Consumer Prices Index (CPI) increased notably from 1.7% in September.
- Rising energy prices, particularly gas and electricity, contributed significantly to this increase.
- Transport costs saw a slight decline, providing some relief amidst the overall rise.
- Cultural and recreational sectors experienced price drops, offsetting some inflationary pressures.
According to the Office for National Statistics (ONS), the inflation rate, measured by the Consumer Prices Index (CPI), rose to 2.3% in October, climbing from 1.7% in September. This marks the highest rate of inflation since May and positions the figure above the Bank of England’s target rate of 2%.
The monthly rise in CPI was recorded at 0.6% for October 2024, contrasting with a minimal change in the previous year. The CPI including owner occupiers’ housing costs (CPIH) also showed an increase, rising 3.2% over the past 12 months, up from 2.6% in September.
Energy prices, particularly electricity and gas, were the primary drivers behind the inflation hike. The ONS highlighted housing and household services as major contributors to the monthly change in both CPIH and CPI annual rates. Offsetting this rise somewhat, the recreation and cultural sectors saw a decrease in prices.
The rise in energy costs is evident in Ofgem’s estimate, indicating that an average household’s dual fuel bill, paid via direct debit, increased to £1,717, which is £149 higher annually.
Transport costs showed a decline of 2.0% over the 12 months to October 2024, compared to a 2.4% decrease in September. Despite this yearly decline, a slight monthly rise of 0.1% was noted in October, in contrast to a 0.2% decrease in the same month last year.
The ONS Chief Economist, Grant Fitzner, explained that the rise in inflation was largely due to the increased energy price cap, resulting in higher gas and electricity costs compared to decreases seen the previous year. However, these were partly counterbalanced by reductions in prices in the recreation and culture sectors, such as live music and theatre tickets.
The inflation increase in October is significantly influenced by energy prices, despite some relief from lower costs in other sectors.
