Price of food rising - but inflation steady at 3%

A shopper walks in the Old Town shopping area of Pasadena California

The rise compares with a 3.01% increase forecast by economists in a Reuters poll.

The UK's Consumer Prices Index (CPI) inflation rate - the key measure of inflation - was 3% in October, unchanged from September's reading, according to the Office for National Statistics.

The sharp fall in the value of the pound following the UK's vote to leave the European Union a year ago has raised the cost of imports and pushed up the rate of inflation.

Inflation's impact on the British economy is being exacerbated by the fact that real wages are actually growing more slowly than prices are rising, meaning that the average Brit is actually seeing the amount of money they have to spend decrease.

That is because numerous price increases that have driven inflation to five-year highs were already set to fall out of the inflation calculations early next year.

Pan, tobacco and intoxicants saw high inflation and settled at 6.91 per cent. Clothing and footwear (4.76), housing (6.68), and fuel and light (6.36) were costlier on sequential basis.

He said: 'What are we trying to say to the people of UK?

Richard Stone, chief executive of The Share Centre, said it was surprising that inflation held steady at 3 per cent in October, as many economists expected the effect of sterling's devaluation following the EU Referendum to continue to come through in the figures and drive inflation higher.

A separate study released by research firm Kantar Worldpanel suggested that grocery prices are up 3.4 per cent in the past 12 months, adding £143.70 a year to the typical family's annual bill.

For this reason, some experts believe policymakers should focus on growing the United Kingdom economy, especially in the light of Brexit, rather than focusing on whether interest rates will rise.

Such a hit to supply could, Mr Broadbent warned, prompt the Bank to raise interest rates even if the overall economy suffers a sharp slowdown in GDP growth.

Speaking at the London School of Economics, he said high inflation is caused by the contrast between "pessimistic" financial markets and buoyant individuals in the wake of Brexit.

"Homeowners on variable rate mortgages in particular 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".



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