More expensive food also contributed to a 2% rise in prices in October alone, helping to push the rise in the cost of living over the previous 12 months to a level not seen since October 1981. The Office for National Statistics (ONS) said households were paying 90% more for gas, electricity and other fuels than a year earlier. Food price inflation rose from 14.6% to 16.4% – the highest level since 1977. Inflation graph The City had expected a rise in inflation, but the rise in the annual rate from 10.1% in September was clearly sharper than economists had forecast for 10.7% and was unwelcome news for Jeremy Hunt before Thursday’s Fall Statement. Responding to the figures, the chancellor said: “We cannot have long-term, sustainable growth with high inflation. Tomorrow I will table a plan to bring down debt, achieve stability and reduce inflation, while protecting the most vulnerable.” Inflation graph The ONS said the introduction of the household energy price guarantee, which was originally set for two years and has since been reduced to six months, limited the rise in electricity, gas and other fuel prices to 24.3% between September and October, with natural gas prices increasing by 36.9% and electricity prices by 16.9%. Without the guarantee, the rise would have been 75% and total annual inflation 13.8%, he added. Inflation as measured by the consumer price index stood at 4.2% in October 2021, but has moved steadily higher over the past 12 months. Core inflation, which strips out food, energy, tobacco and alcohol, was unchanged at 6.5%. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. The rise was expected by the Bank of England in its latest quarterly monetary policy report. Threadneedle Street said inflation would remain high and ease to just 10% in the first three months of 2023. Inflation graph ONS chief economist Grant Fitzner said: “Rising gas and electricity prices have pushed inflation to the highest level for more than 40 years, despite the energy price guarantee. Over the past year, natural gas prices have increased by nearly 130%, while electricity has increased by about 66%. “Increases in a number of food items also pushed inflation. These were partly offset by motor fuels, where average petrol prices fell on a monthly basis, while the price of diesel rose, pushing the price gap between the two fuels to the highest on record. “There was further evidence that the costs faced by businesses are rising more slowly, driven by crude oil and oil prices.”
