UK inflation hits its highest level in 10 years

Inflation rose in the United Kingdom in October to 4.2% year-on-year, its highest level since November 2011 when it stood at 4.8%, driven by energy prices, the National Statistics Office British (ONS) in a statement.

After having registered a slight fall in September to 3.1%, inflation rose again, driven especially by a rising energy prices for households, second-hand cars or fuel, according to the ONS.

The energy price ceiling set by the UK authorities increased on October 1.

The Bank of england (BoE) has expressed its concern on this issue on several occasions, but at its last meeting in November it decided not to adjust its interest rate policy, which is at a historically low level of 0.1%, to boost the economy.

According to economists, this rise in inflation faster than anticipated – the BoE expected a figure of “a little less than 4%” in October – could finish convincing the monetary institution to intervene as of next month.

Even more so considering that the labor market figures published the day before, and that the BoE is closely following, showed a new drop in unemployment, to 4.3 percent.

“After the positive news” in the employment sector, this new rise in inflation “makes an increase in interest rates in December even more likely,” estimates Paul Dales of Capital Economics.

Difficult winter

The monetary institution faces the same dilemma that other central banks have: containing accelerating inflation without stifling stunted growth.

“I am very uncomfortable with the inflation situation,” said Andrew Bailey, governor of the BoE on Monday, whose projections estimate a rise in prices to 4.5% in November, a stabilization at that level in early 2022 and a new rise to 5% in April.

With the arrival of the boreal winter, inflation makes poverty reduction associations fear an extremely difficult months for the most modest households.

We know that people are facing pressures related to the cost of living, “British Economy Minister Rishi Sunak reacted in a statement on Wednesday in a statement.

The government plans support measures for “more than 4.2 billion pounds” (about $ 5.64 billion), of which 500 million pounds (about $ 670 million) to help the most modest households pay their electricity bills. or their food during the winter, Sunak recalled.

Inflation in the United Kingdom is lower than in the United States, where prices increased 6.2% year-on-year in October, something that had not happened for thirty years, or Germany (+ 4.5% in October).