In­fla­tion holds steady thanks to fall in fuel costs

The Scotsman - - News Digest - By AN­GUS HOWARTH

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 per cent last month, un­changed from a five-year high in Septem­ber.

Economists had pen­cilled in a higher rate of 3.1 per cent, which would have forced Bank of England Gov­er­nor Mark Car­ney to write a let­ter to Chan­cel­lor Philip Ham­mond.

The UK gov­ern­ment has set an in­fla­tion tar­get of 2 per cent, with pro­to­col dic­tat­ing that the Bank must con­tact Mr Ham­mond if in­fla­tion ex­ceeds 3 per cent or falls short of 1 per cent.

The Bank, which raised in­ter­est rates to 0.5 per cent this month, ex­pects CPI to peak at around 3.2 per cent.

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