The Consumer Prices Index (CPI) rate of inflation was unchanged at 3% in October, the latest Office for National Statistics (ONS) figures reveal.
The largest contributors towards inflation were the price of food and non-alcoholic beverages, which continued to increase to 4.1% - its highest level since September 2013.
Rising recreational goods prices also contributed towards the upward change in the rate between September 2017 and October 2017.
However, these upward contributions were offset by falling motor fuel and furniture prices, along with owner occupiers’ housing costs, which remained unchanged between September 2017 and October 2017, having risen a year ago.
The Consumer Prices Index including owner occupiers’ housing costs (CPIH), which is the ONS’ preferred measure of inflation, was also unchanged in the year to October at 2.8%.
Meanwhile, the Retail Prices Index (RPI) measure of inflation, which is used to calculate several household bills and transport prices, rose from 3.9% in the year to September to 4% in the year to October.
‘Cash-strapped consumers will continue to feel the pinch’
Earlier this month, the Bank of England raised interest rates for the first time in 10 years from 0.25% to 0.5% amid concerns about rising inflation.
Commenting on today’s inflation figures, Maike Currie, investment director for personal investing at Fidelity International, says: “While the Bank of England raised interest rates at the beginning of this month given concerns over inflation, it will take some time for inflation to fall back nearer the Bank of England’s 2% target.
“This means cash-strapped consumers will continue to feel the pinch as wages lag price rises. Homeowners on variable rate mortgages will be feeling the biggest squeeze, having to contend with the prices of everyday goods and services going up, and dealing with rising mortgage repayments.
“To rub salt in the wounds, many banks are holding their cards close to their chest when it comes to revealing whether they will pass the rate hike onto savers, meaning little or no respite for those who hold their savings in cash.”
Ben Brettell, senior economist at Hargreaves Lansdown, adds: “Inflation was expected to tick upwards to 3.1% today, but in the event it held steady at 3%, with lower fuel costs offsetting higher food prices. This narrowly averts the need for Bank governor Mark Carney to write an explanatory letter to the Chancellor.
“In any case, it would have been an easy letter to write. The spike in inflation should be temporary, as the effect of the weaker pound filters through to prices. And the Bank has already responded, with Mr Carney and colleagues raising interest rates last month.”