Inflation in the United Kingdom hit a 41-year high of 11.1% in October, blowing past economists’ expectations as prices for food, transportation and energy continue to spiral upwards.
Economists polled by the Reuters News Agency had forecast an annual increase in the British consumer price index (CPI) of 10.7%.
October’s 11.1% increase is up from an inflation reading of 10.1% in September of this year.
Despite efforts to cap energy prices across the U.K., the Office for National Statistics said the largest contributions to October’s inflation rate came from electricity, gas, and other fuels.
On a monthly basis, inflation in the U.K. rose 2% in October.
The cost of housing and household services, which includes energy bills, rose by an all-time high of 11.7% in October from a year earlier.
Prices for food and non-alcoholic beverages also contributed to October’s inflation, rising by an annualized 16.4% to reach its highest level since September 1977.
The Bank of England and British government are coordinating efforts to tighten fiscal and monetary policy to lower inflation. The central bank raised interest rates by 75-basis points earlier this month, its largest increase in 33 years, to take the British Bank Rate to 3%.
British Finance Minister Jeremy Hunt is scheduled to deliver a fiscal update tomorrow (November 17) and is expected to announce substantial tax increases and spending cuts to help bolster the government’s finances.
