It’s the first rise in the Consumer Prices Index (CPI) for three months – it was 1.7% in September – and the figure is above the 2.2% forecast by economists. However the figure is still well below its recent peak of 11.1% in October 2022.
On a monthly basis, the CPI rose by 0.6% in October 2024, up from being little changed in October 2023.
The CPI including owner-occupiers’ housing costs (CPIH) rose by 3.2% in the 12 months to October 2024, up from 2.6% in September and from a recent peak of 9.6% in October 2022.
The owner-occupiers’ housing costs component of CPIH rose by 7.4% in the 12 months to October 2024, up from 7.2% in the 12 months to September. This is the highest annual rate since February 1992.
The ONS said the largest upward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services, mainly because of electricity and gas prices. The largest offsetting downward contribution came from recreation and culture.
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Alastair Douglas, CEO of TotallyMoney, said: “While it’s hardly been a nightmare before Christmas, it’s not been a dream start for the new Government. Since the Autumn Budget, we’ve heard that unemployment, mortgage rates, and repossessions are creeping up. We’re now waiting to be told that energy bills will increase again in January, while retailers are warning that tax hikes will further drive inflation and job losses.
“Following five turbulent years, people need stability and hope, but they say bad luck comes in threes. Could the news of tariffs on UK exports to the US be just that, following the global pandemic and cost-of-living crisis? Whatever the case, the Prime Minister and his cabinet need to show that what they’re doing is having a positive impact – and that there’s light at the end of this long, dark tunnel.”
Alice Haine, personal finance analyst at Bestinvest, said: “The BoE made its second quarter-point rate cut earlier this month, with many hoping for a follow-up in December. The prospect that the next rate reduction may now be put on the back burner until next year will be disappointing for consumers.
“While the rate-setting Monetary Policy Committee is likely to consider other data points aside from the headline inflation rate when they deliver their next interest rate decision – such as the cooling jobs market and slowing economic growth in the third quarter of the year – Labour’s spending and tax plans in the October 30 Budget have thrown a spanner in the works. The BoE has already warned that Chancellor Rachel Reeves’ changes may push up the cost of living, with major businesses also wading in to raise the alarm over the effect hikes in business taxes will have on inflation.”
