Petrol prices push up inflation

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Post by IVA News » Tue Nov 13, 2007 10:36 am
Petrol prices push up inflation

Rising petrol prices pushed the UK inflation rate to 2.1% in October, above the government's 2% target, official figures show.

The rise in the consumer prices index also stemmed from higher food prices.

The figure was up from September's rate of 1.8%, and the RPI inflation measure, on which many pay deals are based, rose to 4.2% in October from 3.9%.

Prices rose by more than economists expected and could reduce the prospect of a cut in interest rates.

The Bank of England's Monetary Policy Committee (MPC) kept borrowing costs at a six-year high of 5.75% last week.


Many analysts expect an interest rate cut to 5.5% early next year given a weaker outlook for the economy as the effect of the recent turmoil in financial markets filters through to consumers.

"October's UK CPI figures will heighten the growing dilemma for the MPC posed by slowing activity on the one hand and lingering inflation concerns on the other," said Jonathan Loynes, an economist at Capital Economics.

The Office for National Statistics said the chief reason for the rise was higher petrol costs, which added 0.29 percentage points to the rate. Food price inflation added 0.12 percentage points.

Oil prices remain close to record highs near $100 a barrel, and the average price of petrol rose above £1 per litre last week.

Rising raw material costs have increased food prices, including bread.

On Monday data showed that rising petrol, chemicals and food prices had sent factory gate inflation to the highest rate for nearly 12 years.


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Post by ajwt2 » Sun May 25, 2008 3:15 pm
This chart says it all really


Petrol up about a million pence in the last few months.
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