Ris­ing food prices off­set by cheap fuel

The Press and Journal (Inverness, Highlands, and Islands) - - NEWS -

In­fla­tion 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 fiveyear high in Septem­ber.

Econ­o­mists had ex­pected 3.1%, which would have forced Bank of Eng­land Gov­er­nor Mark Carney to write a let­ter to Chan­cel­lor Philip Ham­mond.

The gov­ern­ment has set an in­fla­tion tar­get of 2%, with pro­to­col dic­tat­ing that the bank must con­tact Mr Ham­mond if in­fla­tion ex­ceeds 3% or falls be­low 1%.

The bank, which hiked base rates to 0.5% this month, ex­pects CPI to peak around 3.2%, adding fur­ther pres­sure to UK house­holds grap­pling with pal­try wage growth.

An­nual food prices rose to the high­est level in four years, up 4.2% last month in con­trast to a 3.4% ex­pan­sion in Septem­ber. On the month, food prices grew by 0.6%, up from a 0.2% fall over the same pe­riod last year.

Elec­tric­ity, gas and other do­mes­tic fu­els pushed 1.3% higher on a monthly ba­sis, com­pared to 0.6% growth in Oc­to­ber 2016.

That jump was trig­gered by Bri­tish Gas, which de­cided to hike its stan­dard tar­iff by 12.5% on Septem­ber 15.

The main down­ward pres­sure on the cost of liv­ing came from mo­tor fuel prices, which fell by 0.4% month-on­month af­ter ris­ing by 2.3% in Oc­to­ber 2016.

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