Surging energy bills push inflation to 41-year high

UK inflation soared to a 41-year high of 11.1% last month as rocketing energy and food prices intensified the cost-of-living crisis, heaping pressure on the Chancellor ahead of his Autumn Budget today.

October’s rate of Consumer Prices Index (CPI) inflation was worse than expected, hitting the highest rate since October 1981 and up from 10.1% in September.

Most economists had been expecting a rise to 10.7%. The big leap follows a near 130% surge in gas prices over the past year, with electricity rising by around 66%, while food inflation hit a record high of 16.5%, according to the figures from the Office for National Statistics (ONS).

The jump in inflation comes despite the Government’s energy support, which has sought to limit annual household gas and electricity bills at around £2,500 a year.

Prime Minister Rishi Sunak said inflation was the “enemy we need to face down”, but insisted the decisions in today’s autumn statement would be “based on fairness, they will be based on compassion”. However, fears are mounting over the impact on already struggling households and businesses, with Chancellor Jeremy Hunt expected to unleash tax hikes and spending cuts to address a black hole in the nation’s finances.

Economists are hopeful that October’s inflation was the peak, predicting that CPI will gradually ease back after October, though it is unknown at this stage what energy support will be available after next April.