Inflation in Britain has risen to a 41-year high, driven by rising energy, food and transport prices amid a worsening cost-of-living crisis, official data showed on Wednesday.
The Consumer Price Index reached 11.1% in October, the highest level since 1981, the Office of National Statistics announced in a statement.
That compared with 10.1 percent in September, which matched July’s level and was the highest in 40 years.
Household fuel bills rose further despite the UK government’s energy price freeze, as the market grappled with the fresh impact of top producer Russia’s invasion of Ukraine.
The October figure beat market expectations by 10.7 percent and was higher than the top of the Bank of England’s forecast.
“Rising gas and electricity prices pushed inflation to its highest level for more than 40 years, despite the Energy Price Guarantee,” said Grant Fitzner, chief economist at the ONS.
In the last year, gas prices have risen by 130% and electricity by 66%, according to the ONS.
Food prices and transport costs also increased inflation.
Despite runaway inflation Britain’s energy subsidy sought to limit annual energy bills to an average of £2,500 a year.
Chancellor of the Exchequer Jeremy Hunt, on the eve of his government’s main budget, blamed Russian President Vladimir Putin’s war in Ukraine for rising prices as well as the fallout from the pandemic.
“The effects of COVID and Putin’s invasion of Ukraine are driving up inflation in the UK and around the world,” Hunt said.
“This insidious tax eats away at paychecks, household budgets and savings, while scuttling any chance for long-term economic growth.”
The conflict in Ukraine has also raised global inflation to its highest level in decades, sparking economic turmoil and forcing central banks to raise interest rates.
This month the Bank of England raised interest rates by the biggest since 1989 to tackle rampant inflation and warned that the UK economy could be in a prolonged recession until mid-2024.
The BoE said borrowing costs were rising by 0.75 percentage points to three percent — the highest level since the 2008 global financial crisis — to cool UK inflation, which hit nearly 11 percent.
Hunt added on Wednesday that “tough” decisions would be needed in Thursday’s budget to help the BoE meet its 2.0 percent inflation target.
“We cannot have long-term sustainable growth with high inflation,” he said.
