UK inflation hits six-month high due to rising energy prices

UK inflation surged to 2.3% in the year to October, the highest rate in six months, driven primarily by an increase in energy prices, official figures revealed.

This marked a larger-than-expected rise from 1.7% in September.

Annual gas and electricity bills for a typical household went up by about £149 last month, but prices are rising much more slowly than in recent years.

The latest inflation figure comes after the government revealed that an additional 50,000 pensioners will be living in relative poverty next year as a result of cuts to the winter fuel allowance.

Higher inflation pushes up the cost of living for households, and can lead to interest rates remaining at a higher level, making the cost of loans, credit cards and mortgages, more expensive.

Inflation has fallen from its peak in October 2022, but when the rate falls, it does not mean that prices are coming down, but that they are rising less quickly.

There are concerns inflation could be fuelled further by big tax and spending plans announced in the government's Budget, as well as potential trade taxes imposed by the US, with Donald Trump pledging a 20% tariff on all imports.

Some charities have already voiced concerns about how less well-off households will cope during the colder months.

In September, the government announced the £300 winter fuel payment is to be means-tested for all but the poorest pensioners.

Other support for energy bills which was handed out in recent years has since been scaled back.

However, with temperatures dropping to freezing levels this week, the focus on the cost of heating homes is likely to become the focus of many households.

Although there has been a jump in electricity and gas costs, energy prices are still lower than last winter and the winter before. People using an typical amount of gas and electricity are currently paying £1,717 under the energy price cap, which is set by the regulator Ofgem.

The cap determines the price paid for each unit of energy used in 27 million homes across Britain. Different rules apply in Northern Ireland.

News.Az