British inflation rose to 11.1 percent in October, led by rising energy, food and transport costs.
Britain’s inflation has hit its highest level in 41 years, driven by rising energy, food and transport costs amid a deepening crisis, according to government figures.
The Consumer Prices Index hit 11.1 percent in October, reaching its highest level since 1981, the Office for National Statistics (ONS) said on Wednesday.
This compared to 10.1 percent in September, which matched July’s level and was the highest in 40 years.
Domestic oil prices continued to rise even as UK government electricity prices stood still as the market suffered the latest shock from Russia’s invasion of Ukraine.
The October figure exceeded market expectations by 10.7 percent and was higher than the Bank of England had predicted.
“Rising gas and electricity prices pushed inflation to the highest level for more than 40 years, despite the Energy Price Guarantee,” said ONS economist Grant Fitzner.
In the last year, gas prices have risen by 130 per cent and electricity prices by 66 per cent, according to the ONS.
Food and transportation costs also contributed to inflation.
The price drop comes despite Britain’s energy subsidy, which aims to reduce annual electricity bills by an average of 2,500 British pounds (about $2,970) a year.
Chancellor of the Exchequer Jeremy Hunt, speaking on the eve of his big government budget, criticized Russian President Vladimir Putin’s war in Ukraine due to tariffs, as well as the fallout from the coronavirus pandemic.
“The arrival of COVID and Putin in Ukraine is causing inflation in the UK and around the world,” Hunt said.
“This fraudulent tax is destroying paychecks, household budgets and savings, while stifling any chance of long-term economic growth.”
The conflict in Ukraine has also pushed inflation to the highest level in decades around the world, causing financial turmoil and forcing central banks to raise interest rates.
The Bank of England (BoE) this month raised interest rates to the highest level since 1989 to tackle rising inflation – and warned that the UK economy could be in recession until mid-2024.
The BoE said it was raising borrowing costs by 0.75 percent to 3 percent – the biggest rate since the global financial crisis in 2008 – to cool UK inflation that has peaked at around 11 percent.
Hunt added on Wednesday that “tough” decisions would be needed in Thursday’s budget to help the BoE meet its 2 percent inflation target.
“We cannot have long-term, sustainable growth and inflation,” he said.