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Uk inflation jumps on back of rising cost of clothing and food

By Henry Saker-Clark, PA City Reporter

UK inflation bounced higher last month as the price of food and clothing jumped, according to official figures.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation rose to 0.7% in October from 0.5% in September.

It surpassed the expectations of analysts, who had predicted that inflation would stay flat at 0.5% for the month.

Deputy national statistician for economic statistics at the ONS, Jonathan Athow, said: “The rate of inflation increased slightly as clothing prices grew, returning to their normal seasonal pattern after the disruption this year.

“The cost of food also nudged up, while second-hand cars and computer games also all saw price rises.

“These were partially offset by falls in the cost of energy and holidays.”

Economists at the ONS said clothing and footwear prices increased by 2.5% for the month, rebounding after a period of heavy discounting through the summer as stores tried to attract more customers in the face of restrictions.

Food inflation was another key driver of rising inflation, as prices bounced back from deflation in September.

It was particularly caused by an increase in the price of vegetables and fruit, the ONS said.

Transport and vehicle prices also pushed higher, as the price of second-hand cars rose by 1.4%, with new car prices up 0.5% as demand for cars improved in the face of guidance to avoid public transport.

The largest downward pressure on inflation was caused by a fall in household energy prices.

It revealed that gas prices dived by 12.3% and electricity prices slumped 3.2% between September and October.

The Retail Price Index (RPI), a separate measure of inflation, was 1.3% in October, rising from 1.1% in the previous month.

Meanwhile, the CPI, including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 0.9% last month, up from 0.7% in September.

Rachel Winter, associate investment director at Killik & Co, said: “The tiered restrictions in October led to a fall in consumer spending.

“Although inflation has managed to rise, it remains at a very low level.

“As we make our way through this second lockdown, we wait to see if we’ll have limitations on the public lifted or are told to revert back to region-specific restrictions.

“Either way, we’ll continue to see the impact on inflation figures of people being told to stay at home throughout November, advised not to travel and non-essential shops shut down once again.”