UK inflation jumps to 41-year high of 11.1% | CNN Business

London
CNN Business
 — 

Soaring energy costs drove UK inflation to a fresh high in October, the latest piece of bad news for an economy sliding into recession.

The annual rate of inflation rose to 11.1% in October, up from 10.1% in the 12 months to September, the Office for National Statistics said on Wednesday.

The sharp increase in living costs was caused by rising gas and electricity prices, despite a government energy price guarantee, which caps energy bills at £2,500 ($2,970) for the typical household. Food price inflation rose to 16.4%.

“Over the past year, gas prices have climbed nearly 130% while electricity has risen by around 66%,” ONS chief economist Grant Fitzner said in a statement.

The prices of goods and services bought or consumed by UK households increased by 2% between September and October, according to the ONS. That means that in the space of one month, prices rose by as much as they did in the entire year to July 2021.

The acceleration in inflation even as the economy weakens presents a conundrum for policymakers because Britain’s economy is expected to suffer as the Bank of England keeps raises borrowing costs to cap rising prices.

Data last week from the ONS showed that the UK economy shrank in the third quarter. The Bank of England’s latest projection is for the recession to continue through the first half of 2024.

— This is a developing story and will be updated.