Inflation rate saves Bank from letter

Britain’s surging inflation unexpectedly held steady last month, as rising food prices were countered by a drop in fuel costs.

Figures from the Office for National Statistics showed the Consumer Prices Index (CPI) measure of inflation was 3% in October, unchanged from a five-year high in September.

Economists had pencilled in a higher rate of 3.1%, which convention states would have forced Bank of England Governor Mark Carney to write a letter to Chancellor Philip Hammond explaining why it was as high.

The Bank, which raised interest rates to 0.5% earlier this month, expects CPI to peak at around 3.2% in the autumn, adding further pressure to UK households.

Chris Williamson, chief business economist at IHS Markit, said: “The recent surge in price pressures is primarily due to the depreciation of sterling since last year’s EU referendum, which has increased the cost of imported goods and services, but today’s numbers will add to the sense that the worst of this impact has already passed.”