UK inflation rate rises to 2.3% in October – what it means for your money
THE UK’s rate of inflation has risen above the Bank of England’s target.
The Office for National Statistics (ONS) said the Consumer Price Index (CPI) measured 2.3% in the 12 months to October.
Today’s reading is slightly higher than expected with the experts predicting the figure to rise to 2.2%.
It comes after inflation measured 1.7% in September, marking the first time it had fallen below the Bank of England’s target in three years.
The central bank has a target of keeping inflation at 2%.
Inflation is a measure of how much the prices of everyday goods such as food and clothes, and services such as train tickets and haircuts, have increased compared to a year earlier.
It’s important to note that when inflation drops it doesn’t mean that prices have stopped rising, it just means they are doing so at a slower pace.
The Bank of England has a target of keeping inflation at 2%.
Today’s reading means that policymakers might act more cautiously when it comes to cutting the base rate.
It follows a decision by the Monetary Policy Committee (MPC), the BoE’s rate-setters to reduce the base rate from 5% to 4.75% earlier this month.
The base rate is used by lenders to determine the interest rates offered to customers on savings and borrowing costs including mortgages.