High energy costs push UK’s inflation rate to 2.3%

The United Kingdom’s consumer price index (CPI) rose to 2.3 percent in October from 1.7 percent in September.

The UK Office for National Statistics (ONS), attributed the increase to rising energy prices.

On a month-on-month basis, the CPI rose by 0.6 percent in October this year — up from 0.1 percent in October 2023, the ONS said.

The office also said the consumer prices index, including owner occupiers’ housing costs (CPIH), rose by 3.2 percent in the 12 months to October — up from 2.6 percent in September.

“The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services, mainly because of electricity and gas prices; the largest offsetting downward contribution came from recreation and culture,” the statistics firm said.

“Monthly housing and household services prices rose by 1.3% in October 2024, having fallen by 0.3% last year.

“The annual rate rose to 5.5%, up from 3.8% in the year to September. The rise in the divisional annual rate is mainly because of electricity prices, with a sizeable contribution from gas too.

“This reflects the rise of the Office of Gas and Electricity Markets (Ofgem) energy price cap in October 2024, described on the Ofgem website. Ofgem estimates that for an average household paying by direct debit for dual fuel, this equates to £1,717, a rise of £149 on an annual bill.”

The ONS said food and non-alcoholic beverage prices rose by 1.9 percent in October — slightly up from the 1.8 percent in September 2024.

Speaking on the inflationary movement in the country, Grant Fitzner, ONS’ chief economist said while higher energy costs contributed, the increase was offset by falls in live music and theatre ticket prices.

“The cost of raw materials for businesses continued to fall, once again driven by lower crude oil prices,” Fitzner added.

On November 7, the Bank of England (BoE) had predicted that inflation would rise from 1.7 percent in September to 2.5 percent by the end of the year and not return to its 2 percent target until mid 2027  — a year later than it previously thought.