18 October 2017
Inflation peaks at highest level since 2012
Inflation has surged to a five-year high, increasing the costs of products and services and boosting the prospect of an interest rate hike.
According to the Consumer Price Index (CPI), inflation for September hit 3%, marking the highest rate since April 2012.
Higher food and transport costs have propelled the cost of living measure to such a high level, the figures from the Office for National Statistics (ONS) show.
Andrew Sentance, a senior economic adviser at PwC, said: "This latest rise in inflation will add to the squeeze on the spending power of consumers and is likely to prolong the period of sluggish growth we are currently seeing here in the UK."
Mr Sentence says further inflationary rises cannot be ruled out before the end of 2017.
He added: "Relatively high inflation will also add to the pressure on the Bank of England Monetary Policy Committee (MPC) to raise interest rates next month."
Minutes from the MPC's September meeting suggest all policymakers on the committee believe "some withdrawal of monetary stimulus was likely to be appropriate over the coming months".
The Bank of England has been tasked with an inflation target of 2%. Should the rate exceed 3% or fall below 1% the bank's Governor Mark Carney is required to contact the Chancellor.
September's rise has prompted Mr Carney to contact Philip Hammond in writing to explain the rise.