UK inflation rose to 0.7% in October as clothing and food prices increased

INFLATION in the UK 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, up from 0.5% in September.

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

The latest figures comes after the inflation rate plunged from 1% to 0.2% in August due to the Eat Out to Help Out scheme.

This represented the lowest level of CPI inflation, which measures how prices have changed over a year, since December 2015.

Jonathan Athow, deputy national statistician for economic statistics 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.

Why does inflation matter?

INFLATION is a measure of the cost of living. It looks at how much the price of goods, such as food or televisions, and services, such as haircuts or train tickets, has changed over time.

Usually people measure inflation by comparing the cost of things today with how much they cost a year ago. The average increase in prices is known as the inflation rate.

The government sets an inflation target of 2%.

If inflation is too high or it moves around a lot, the Bank of England says it is hard for businesses to set the right prices and for people to plan their spending.

High inflation rates also means people are having to spend more, while savings are likely to be eroded as the cost of goods is more than the interest we're earning.

Low inflation, on the other hand, means lower prices and a greater likelihood of interest rates on savings beating the inflation rate.

But if inflation is too low some people may put off spending because they expect prices to fall. And if everybody reduced their spending then companies could fail and people might lose their jobs.

See our UK inflation guide and our Is low inflation good? guide for more information. 

"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."

Elsewhere, the Consumer Prices Index including housing costs (CPIH) measure of inflation rose to 0.9% in October, up from 0.7% in September.

More to follow…

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