Food price hikes and university fees contribute
Inflation in the UK rose 2.7 percent in October, according to the latest figures from the Office for National Statistics (ONS).
The ONS said the drivers behind the rise were education and food. Education costs grew 19.1 percent last month as the Coalition government got rid of the university fee cap. Food prices, vegetables in particular, rose on the back of record wet weather that affected crop yields, the BBC reports. Confectionary prices rose too, as the ONS took into account many of the manufacturers shrinking the products.
In the Consumer Prices Index, There were also smaller contributions from non-alcoholic beverages and transport, the ONS said, those these were offset – partially – by downward pressures from housing and household services, as well as recreation and miscellaneous goods and services sectors. The CPI rose 0.4 percent compared to September.
Annual inflation in the Retail Prices Index stood at 3.2 percent for October, an increase from 2.6 percent in September. As well as tuition fees, food and housing, fuel and light gave he largest downward pressure.
UK economist at RBS, Ross Walker, told the Beeb that the figures were worse than expected, and this was taking into account the planned tuition fee hikes: the surprise was in food price increases.
Scotia Bank economist Alan Clarke grimly predicted that the Bank of England will not manage to keep to its two percent inflation target. The Bank of England will release its own inflation report Wednesday.