UK Inflation Rate Hits Highest Level in a Decade as Energy Prices Soar
The figures show the inflation rate has hit its highest level since 2011
The inflation rate in the United Kingdom is following the U.S as it hits the highest level in ten years while the cost of living skyrockets amid rising energy prices.
On Wednesday, the Office for National Statistics (ONS) reported the Consumer Prices Index rose by 3.8 percent leading up to October 2021, this is a jump of 2.9 percent in the year up to September.
The figures show the inflation rate has hit its highest level since 2011.
According to the ONS, the increase is a result of the national lockdowns in 2020, as well as soaring energy costs after the government’s Office of Gas and Electricity Markets (Ofgem) lifted energy price caps.
In the past year alone, the price of energy rose by 28.1 percent.
Meanwhile, electricity costs have soared by 18.8 percent.
Petrol prices also increased by 25.4p, surging to £1.40 per litre.
Householders have also been hit hard, with rises seen in the prices of domestic energy, food, transportation, and education.
ONS chief economist Grant Fitzner said:
“This was driven by increased household energy bills due to the price cap hike, an increase 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.”
Chancellor Rishi Sunak said:
“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 £4.2bn to help them.
“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 £500m Household Support Fund for the most vulnerable families, fuel and alcohol duty freezes, and the energy price cap.”
In the year to October 2021, the Consumer Prices Index, including owner occupiers’ housing costs, grew 3.8% in the year to October 2021.
Chief Economist at KPMG UK, Yael Selfin said:
“While not unexpected, confirmation that inflation is moving further away from its 2% target may seal the Bank of England’s resolve to raise rates in December, following the strong labour data released this week.”
Britons will also see their bank balances shrink after Prime Minister Boris Johnson is set to increase taxes to a seventy-year high.