UK inflation grows to 41-year high amid surge in gas and electricity bills

Dani Sinha reports as inflation rises beyond economists' predictions.

Inflation in the UK rose to 11.1% on Wednesday, according to figures from the Office for National Statistics (ONS).

The rate of Consumer Prices Index inflation grew from 10.1% in September to its present value, representing the highest level for 41 years. The last time inflation was higher was in October 1981.

Most economists had been expecting inflation to rise to 10.7%, but the ONS said "rising gas and electricity prices drove headline inflation".

ONS data showed gas prices have leaped nearly 130% higher over the past year, while electricity has risen by around 66%.

Families were also hit by rising costs across a range of food items, which also pushed up the cost of living to eye watering levels.

How everyday food items have risen in price in the past 12 months

Here are some examples of how the cost of food has risen in the past year.

Low-fat milk 47.9%

Margarine and other vegetable fats 42.1%

Pasta and couscous 34.0%

Sauces, condiments, salt, spices and culinary herbs 33.2%

Whole milk 32.6%

Butter 29.7%

Olive oil 28.3%

Cheese and curd 27.1%

Frozen vegetables other than potatoes 23.7%

Eggs 22.3%

Jams, marmalades and honey 22.2%

Ready-made meals 20.3%

Potatoes 19.9%

Poultry 19.7%

Meat 15.7%

Fish 15.7%

Yoghurt 15.7%

Bread 14.4%

Crisps 13.9%

Edible ices and ice cream 13.1%

Pizza and quiche 12.1%

Fresh or chilled vegetables other than potatoes 11.9%

Sugar 10.9%

Fruit 10.3%

Rice 9.6%

Chocolate 8.6%

Breakfast cereals and other cereal products 7.7%

Confectionery 5.6%

Dried fruit and nuts 3.8%

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The jump in inflation - the biggest leap since March to April when Ofgem’s energy price cap was last changed - comes despite the government energy support, which has sought to limit annual household gas and electricity bills at around £2,500 a year.

Grant Fitzner, chief economist at the ONS, said: "Rising gas and electricity prices drove headline inflation to its highest level for over 40 years, despite the Energy Price Guarantee."

He added: "Increases across a range of food items also pushed up inflation.

"These were partially offset by motor fuels, where average petrol prices fell on the month, while the price for diesel rose taking the disparity in price between the two fuels to the highest on record."

Chancellor Jeremy Hunt blamed the impact of the pandemic and Vladimir Putin’s war in Ukraine for the spike in prices, as he warned that "tough" decisions on tax and spending would be needed in Thursday’s autumn statement.

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"The aftershock of Covid and Putin’s invasion of Ukraine is driving up inflation in the UK and around the world,” he said.

"This insidious tax is eating into pay cheques, household budgets and savings, while thwarting any chance of long-term economic growth.

"It is our duty to help the Bank of England in their mission to return inflation to target by acting responsibly with the nation’s finances. That requires some tough but necessary decisions on tax and spending to help balance the books."

Other new figures from the ONS confirmed fears the cost-of-living crisis is being felt more acutely by low income households, with latest analysis showing that those families suffered annual inflation of 11.9% last month, while the rate stood at 10.5% for high income households.

"Rising energy and food costs have more bearing on the inflation rate experienced by low-income households, as a greater proportion of their expenditure is spent on them compared with high-income households," the ONS said.

The data showed the rate of inflation across food and non-alcoholic drinks hit 16.4% in October - the highest since September 1977.

Families were hit by soaring costs of staple foods, such as milk, cheese and eggs, while there were also hefty hikes across everyday items such as sugar, tomato ketchup and jam.

Meanwhile, Shadow Chancellor Rachel Reeves blamed the latest inflationary surge on "12 years of Tory economic failure".

"Inflation rising yet again will strike more fear in the heart of families across Britain dealing with soaring food prices, rising energy bills and a Tory mortgage premium on their home," she added.