UK inflation accelerated sharply to 2.3 per cent in October as energy prices rose, cementing traders’ expectations that the Bank of England will hold off cutting interest rates again until next year.
The annual rise in the consumer prices index was up from 1.7 per cent in September, according to the Office for National Statistics, and above the expectations of analysts surveyed by Reuters of 2.2 per cent.
Price pressures have been expected to rise after a 10 per cent increase last month in Britain’s energy price cap, which governs millions of households’ gas and electricity bills. October’s figures complicate the BoE’s deliberations over when next to cut rates. The Bank has repeatedly signalled it will pursue a “gradual” approach as it seeks to meet its 2 per cent inflation target.