UK inflation rises by 2.3% in October, again more than BOE's expectation

British inflation jumped by more than expected to go back above the Bank of England's 2 per cent target last month and measures of underlying price growth gathered speed too, showing why the BoE is moving cautiously on interest rate cuts. 

Consumer prices rose by an annual 2.3 per cent in October after showing a 1.7 per cent increase in September which was the first time inflation fell below the BoE's target in almost three and a half years. 

The BoE's most recent forecast and a Reuters poll of economists had both pointed to a reading of 2.2 per cent in October. 

 

The increase was the biggest month-to-month rise in the annual CPI rate since October 2022. 

Services inflation - which the BoE views as a key measure of domestically generated price pressure - rose to 5.0 per cent in October from 4.9 per cent in September, the Office for National Statistics said. 

The BoE had expected it to rise to 5.0 per cent in October. 

Core inflation, which excludes energy, food, alcohol and tobacco, picked up to 3.3 per cent from 3.2 per cent in September.