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Inflation has exceeded the Bank of England’s 2 percent target, rapidly increasing the cost of living.

Consumer price inflation (CPI), which reached its highest level in 41 years with 11.1 percent in 2022, fell to its lowest level in three years with 1.7 percent in September.

However, the latest data from the Office for National Statistics, published on Wednesday morning, showed that inflation rose once again in October, reaching 2.3 percent.

The Bank of England attempts to control inflation (the rate at which the cost of goods and services increases) by raising and lowering the cost of borrowing through the base interest rate, influencing mortgage holders and other borrowers.

The increase is more than the 0.5 per cent increase predicted by economists at the Bank of England. The rise was driven by energy bill increases after Ofgem raised the price cap by nearly 10 per cent to £1,717 for the average household.

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ONS chief economist Grant Fitzner said: “Inflation rose this month because the rise in the energy price cap meant gas and electricity costs were higher compared to the fall in the same period last year.”

“These were partially offset by declines in entertainment and culture, including live music and theater ticket prices. Raw material costs for businesses continued to decline, once again driven by the decline in crude oil prices.”

In its latest forecasts, published earlier this month, the central bank said it expected inflation to rise slightly next year to 2.75 percent, before falling below its 2 percent target.

The central bank cut interest rates for the first time in more than four years in August to 5 percent from 5.25 percent, an 11-year high, and then made another cut this month.

More cuts are expected in the coming months, which will come as a relief to homeowners struggling with huge increases in their mortgages. However, unforeseen significant increases in inflation in the future could put some pressure on hopes that central bank policymakers will continue to cut interest rates.

Economists at Pantheon Macroeconomics had also suggested that the projected recovery in airfares would contribute to a higher inflation rate in October, although these would be offset somewhat by a decline in motor fuel prices and an easing in food inflation.

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Treasury Chief Secretary Darren Jones said: “We know families across Britain are still struggling with the cost of living. That’s why last month’s Budget focused on repairing the foundations of our economy so we can deliver change.

“This includes increasing the National Minimum Wage, freezing fuel duty and protecting employees’ payslips from higher taxes.

“But we know we have more work to do. That’s why the Government is focusing on economic growth and investment to make every part of the country better off.”

MHA economic adviser Joe Nellis said: “The jump in headline inflation from 1.7 per cent to 2.3 per cent would mark the biggest rise since October 2022, while the Bank of England will also put this in the context of rates being virtually incomparable.” Rates exceeding 10 percent were recorded two years ago.

“In the short term, this increase was driven by the energy price cap rising by 9.5 percent in October, which increased the amount of money each household spends on energy bills, but was also driven by longer-term domestic pressures due to a tight labor market and rising employment costs.” .”

He adds that Labour’s October Budget is also likely to have contributed to the windfall, with increased public sector spending, a higher minimum wage and new costs for businesses.

“In addition to these challenges, the strengthening of the US dollar and the potential for tariffs imposed by President-elect Donald Trump will make US imports to the UK more expensive,” Mr Nellis said.

“Given this negative economic outlook, the BoE will be quietly satisfied with inflation remaining below 3 percent in the coming months.”