Soaring Energy Prices Drive UK Inflation To 10-Year High

Well ahead of the Bank of England target of 2.0 percent inflation

High energy prices drove inflation in the UK to a 10-year high of 4.2 percent in October, and energy is expected to fuel additional price hikes next year when the energy regulator is set to raise the so-called price cap. The UK has a so-called Energy Price Cap in place, which protects households from too high bills by capping the price that providers can pass on to them, but which additionally burdens energy providers.

The Consumer Prices Index (CPI) in the UK rose by 4.2 percent in the 12 months to October 2021, up from 3.1 percent in September, the Office for National Statistics said on Wednesday. The October inflation rate was well ahead of the Bank of England target of 2.0 percent inflation, which raises the odds of the central bank raising interest rates in December.

Last month, “the main upward pressure came from electricity, gas and other fuels, which contributed 0.59 percentage points to the CPIH 12-month inflation rate,” the Office for National Statistics said today.

https://oilprice.com/

Comments are closed.