The inflation rate in the UK hit 10.1% in September after dropping to 9.9% last month.
According to the Office for National Statistics report, food prices spiked by 14.6% since last year. This marks the highest jump in food prices since 1982.
Similarly, the cost of household items also increased by 10.7%, while housing, water, and electricity prices soared by 20.2%.
Following the disclosure of the Consumer Price Index, the Pound Sterling resumed its downtrend. The GBP is currently priced at $1.12, down by 0.85% within the last 24 hours.
It is worth noting that September’s inflation rates are typically used to assess the increase in state pensions in the UK. Currently, the average income growth in the UK stagnates at 5.5%.
Last week, the International Monetary Fund (IMF) warned that the UK inflation may remain above the 6.3% threshold by the end of 2023.
The Bank of England earlier expected an inflation rate of 2%. September’s high CPI may incite the BoE to hike the interest rates in the upcoming policy announcement on November 3.
Yohay Alam, the Founder of Forex Crunch noted,
“High prices are set to trigger a big rate hike from the Bank of England, probably 75 bps on November 3. However, it could be higher if the government fails to get its act together and cut costs.“
