Partly Cloudy

Partly Cloudy

max temp: 11°C

min temp: 5°C

Search

UK inflation leaps to 2.7% in October

PUBLISHED: 10:32 13 November 2012

UK inflation leapt to 2.7% last month after university students were hit with a near-trebling in tuition fees and households faced rising food costs, official figures revealed today

UK inflation leapt to 2.7% last month after university students were hit with a near-trebling in tuition fees and households faced rising food costs, official figures revealed today

UK inflation leapt to 2.7% last month after university students were hit with a near-trebling in tuition fees and households faced rising food costs, official figures revealed today.

The Office for National Statistics (ONS) said the Consumer Prices Index (CPI) rose by the largest amount in more than a year between September and October, up from 2.2%.

The Government’s move to lift the tuition fees cap to £9,000 was the biggest factor behind the bigger-than-expected hike in the cost of living, according to the ONS.

The rise was far more than economists had pencilled in and marks the first time inflation has risen since July.

The ONS said education costs jumped by 19.1% last month - the largest increase since records began.

Students starting at university this year will have to pay up to £9,000 a year, increased from a cap of £3,375 a year ago.

Food inflation was also behind the rise in CPI after the record wet weather earlier this year left the UK with its worst potato and carrot harvest in living memory, which pushed up vegetable prices, according to the ONS.

Today’s figures also showed that the Retail Prices Index (RPI), which includes housing costs, rose to 3.2% in October from 2.6% in September as mortgage rates also increased.

The RPI rise between September and October was the largest monthly increase for two and a half years.

Inflation had fallen to a near three-year low in September, but there are fears the cost of living will continue to rise as the raft of recent energy bill hikes also start to come into effect.

The ONS said last month’s SSE bill increase - which saw tariffs rise by around 9% - were not taken into account for the October figures.

Other utility firms are increasing prices from this month onwards.

Some experts believe CPI could rise as high as 3.5% by the middle of next year.

The figures will be in sharp focus ahead of the Bank of England’s inflation report tomorrow.

Rising inflation will likely also fuel speculation that the Bank will hold off from taking further action under its economy-boosting quantitative easing (QE) programme.

The Treasury said today’s figures were “disappointing”, but inflation remains far lower than its peak of 5.2% last September.

James Knightley, an economist at ING Bank, said he expected inflation to rise to 3% by January.

Economist Samuel Tombs, of Capital Economics, said the inflation data provides an “uncomfortable backdrop” to the Bank’s inflation report tomorrow.

“Nonetheless, we still think that the weakness of economic activity will bring inflation down further in time,” he added.

Search hundreds of local jobs at Jobs24

0 comments

Mike Spenser-Morris, of NHP Holdings, would pump millions of pounds into the proposed Travelodge and Starbucks development in Bury St Edmunds.

The UK is almost bottom of a European league table for maternity leave, according to a new study.

The business arms of two of the region’s leading water companies have announced they are joining forces to create a new water and wastewater retailer.

Over a £1,000 was raised for national gardening charity Greenfingers after Perrywood Garden Centre and Nurseries in Tiptree, Essex held a quiz night earlier this month.

Jobs will change rather than disappear over the next decade as robots are increasingly used in the world of work, a study has said.

Management Jobs

Show Job Lists

Most read

Most commented

Topic pages

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter
MyDate24 MyPhotos24