Tuition fees push inflation up

UK inflation leapt to 2.7% last month after university students were hit with a near-trebling in tuition fees and households faced rising food costs, official figures revealed.

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UK inflation predicted to edge up to 2.4%

Howard Archer, chief European and UK economist at IHS Global Insight, has predicted inflation would edge up to 2.4% today.

Inflation would edge up to 2.4%, experts have said Credit: Owen Humphreys/PA Wire

He said food prices were also likely to have risen as a consequence of recent poor harvests overseas and very wet weather in the UK.

Philip Shaw, chief economist at Investec, said September's 34-month CPI low seemed as close as the Bank of England's Monetary Policy Committee would get to hitting its 2% target for quite some time.

Mr Shaw also predicted official statistics would show the consumer price inflation edged up to 2.5% in October and could be as high as 3.5% by mid-2013.

He also said that inflation had been pushed up by a small amount as more goods and services were liable for VAT.

Tuition fees increase blamed for latest CPI figure

A near trebling of university tuition fees after the Government lifted the cap to £9,000 this year is likely to have pushed up the latest CPI figure.

Inflation
University fees went up to £9,000 a year Credit: Chris Ison/PA Wire

The October statistics will also include the first of the energy price rises ahead of winter.

SSE was the first energy company to increase its prices, hitting its customers with an average 9% increase on October 15.

But the full extent of energy price rises by all of the "big six" energy suppliers apart from E.ON will not be felt until later in the year, with npower and British Gas raising their prices this month.

Howard Archer, chief European and UK economist at IHS Global Insight, predicted inflation would edge up to 2.4% today.

He said food prices were also likely to have risen as a consequence of recent poor harvests overseas and very wet weather in the UK.

Inflation expected to edge up as consumers feel the heat

Inflation will edge up today as consumers start to feel the heat of rising energy prices, food costs and university tuition fees.

Inflation
Inflation is expected to edge back up today Credit: Dominic Lipinski/PA Wire

Experts predict that the consumer price index (CPI) for October will be 2.3%, having been at a 34-month low of 2.2% in September, with some predicting the rate could go as high as 2.5%.

Inflation has fallen back from a three-year high of 5.2% in September 2011 but there are fears the rate could reach 3.5% by the middle of next year.

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