Energy bills push inflation to 2.3% in October

The rising cost of energy has pushed inflation up to 2.3% in October, above consensus forecasts of 2.2%, according to the latest figures from the Office for National Statistics (ONS).

The figure is up from the 1.7% posted in September and is also above the desired level of 2% set by the Bank of England.

The ONS said the largest upward contribution to the monthly change in CPI annual rates came from housing and household services, mainly because of electricity and gas prices; the largest offsetting downward contribution came from recreation and culture.

Monthly housing and household services prices rose by 1.3% in October 2024, having fallen by 0.3% last year. The annual rate rose to 5.5%, up from 3.8% in the year to September.

The rise was largely due to the rise of the Office of Gas and Electricity Markets (Ofgem) energy price cap in October 2024, with estimates showing that an average household paying by direct debit for dual fuel are now paying £149 more on their annual bill.

Meanwhile, overall prices in the transport division fell by 2.0% in the year to October 2024, compared with a fall of 2.4% in the year to September. Food and non-alcoholic beverage prices also rose by 1.9% in the year to October, up from 1.8% to September 2024.

ONS chief economist Grant Fitzner said: “Inflation rose this month as the increase in the energy price cap meant higher costs for gas and electricity compared with a fall at the same time last year. These were partially offset by falls in recreation and culture, including live music and theatre ticket prices. The cost of raw materials for businesses continued to fall, once again driven by lower crude oil prices.”