United Kingdom inflation rises to 0.7 pct in October: ONS

United Kingdom inflation rises to 0.7 pct in October: ONS

Economists had expected a year-over-year increase of 0.4 per cent, according to financial data firm Refinitiv.

The ONS said Consumer Prices Index (CPI) inflation rose to 0.7 per cent in October, compared to 0.5 per cent in September.

The data showed annual consumer price inflation hit 0.7% last month.

The monthly rise was nearly entirely driven by rising food prices, particularly lettuce and fresh or frozen chicken, Statistics Canada says.

An index of replacement costs for homeowners rose by the most in 30 years last month, the agency said.

Economists at the ONS said clothing and footwear prices increased by 2.5 per cent for the month, rebounding after a period of heavy discounting through the summer as stores tried to attract more customers in the face of restrictions.

Things aren't expected to get much better, even as retailers hope to entice shoppers into an earlier start to the Christmas shopping season.

Injured Henderson and Sterling released from England duty
While Van Djik and Joe Gomez are expected to miss most of the season, Trent Alexander Arnold is expected to miss out for a month. Henderson could start alongside Thiago and Gini Wijnaldum in midfield, allowing Fabinho to partner Joel Matip at centre-back.

Paul Stockwell, chief commercial officer at Gatehouse Bank, commented: "As predicted, house price growth has intensified in September fuelled by pent-up demand coupled with significant cost-savings to buyers presented by the stamp duty holiday".

"We tend to believe that what is dominating and what will dominate overall is the underlying weakness in the economy and that will tend to keep a lid on overall inflation".

It revealed that gas prices dived by 12.3% and electricity prices slumped 3.2% between September and October. Excluding the drop from calculations, the headline inflation reading would have increased on a year-over-year basis of one per cent.

"However, the 'fundamental" drivers of housing demand are strong, and we are in an environment of low interest rates, with reduced rates of new buildings coming onto the market and limited existing stock. It says the rate will stay there until inflation is back at two per cent.

"Despite the rise in October inflation, the headline rate of CPI continues to remain well below the Bank of England's 2% target as mandated to it by the United Kingdom government". Economists had forecast growth of 0.6%, up from 0.5% in September.

The largest downward pressure on inflation was caused by a fall in household energy prices.

This was mainly due to energy regulator Ofgem's latest six month energy price cap, which came into effect on 1 October, the ONS said. The earliest the bank anticipates the economy would be able to handle higher rates is 2023.

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