UK inflation rises to 1.5% in October
The Office for National Statistics has today announced that Consumer Price Inflation (CPI) rose for the first time in eight months to 1.5% in October from a 5-year low of 1.1% in September.
The rise was not unexpected after a sharp fall in transport costs last year was not repeated this year and because fuel prices had seen record falls this time last year.
The rise means inflation continues to be below the Bank of England’s target of 2%
Meanwhile, Retail Price Inflation (RPI), which includes mortgage costs and is used as the basis for many wage deals, rose from -1.4% in September to -0.8% in October.
The figures are unlikely to raise any eyebrows after the Bank’s Governor, Mervyn King, warned last week that inflation could “rise sharply over the next few months”.
According to Mr King, the rise in inflation would be as a result of the VAT rate, which is set to revert back to the 17.5% mark again in January 2010.