Economy  

Inflation ticks up to 0.7%

Inflation ticks up to 0.7%

Inflation climbed higher than expected last month as clothing, food and furniture prices looked skyward.

Figures from the Office of National Statistics, published today (November 18), showed inflation grew to 0.7 per cent for the month of October, up from the 0.5 per cent reported for September.

It is the third month of rising inflation since August’s five-year low of 0.2 per cent, but it remains well below the Bank of England’s 2 per cent target.

Jonathan Athow, deputy statistician at the ONS, said: "The rate of inflation increased slightly as clothing prices grew, returning to their normal seasonal pattern after the disruption this year.”

Experts had predicted the rate of inflation would remain fairly flat, at around 0.5 per cent.

Rising prices were partially offset by downward contributions from recreation, culture and transport groups.

Laith Khalaf, financial analyst at AJ Bell, said: “The current lockdown may create some short-term volatility in the number, but the overall picture is one of low, gradually rising inflation.

“There is a legitimate question of whether all the fiscal and monetary stimulus thrown at the pandemic will create inflationary pressures further down the line. When confidence returns, we could see businesses looking to recoup losses by pushing through price rises.

“For the foreseeable future though, inflation looks well contained, putting little pressure on the Bank of England to raise rates any time soon.”

imogen.tew@ft.com

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