? CPI hits 5.2% for September
? High energy bills blamed
? Rise contrasts with slow wage growth
? Boost for state benefits tied to September figure
UK inflation jumped to a three-year high last month as energy bills rose sharply, tightening the squeeze on households.
The Office for National Statistics said consumer price inflation rose to 5.2% in September, up sharply from 4.5% in August and also above the economists' consensus forecast for 4.9%. It was the highest rate of inflation since September 2008.
The ONS said that gas, electricity and fuels were the biggest factors in the rise. Overall, prices rose 0.6% on the month from August but for the housing, water and fuels component alone they were up 3.5%. Those costs were up 8.6% on a year earlier, reflecting recent complaints from households, politicians and consumer groups over rising bills.
Food and transport costs were also significantly higher than a year earlier.
The pick-up in inflation contrasts with slow wage growth for workers, meaning their disposable incomes are continuing to shrink. But for those on state benefits, including pensioners, there is a small advantage in the fact that the September inflation number will be used to set payouts.
The inflation rise is likely to worry policymakers at the Bank of England who recently embarked on a fresh programme to pump money into the economy. The process, called quantitative easing, risks stoking inflaiton.
Chris Williamson, chief economist at Markit, said: "However, we do not expect this to deter the Bank from maintaining an ultra-loose policy stance. The Bank is clearly more concerned about the current fragility of the recovery than current above-target inflation, meaning further stimulus could well be on the cards as policymakers seek to prevent the country from sliding back into recession if business and consumer confidence fails to pick up soon."
Source: http://www.guardian.co.uk/business/2011/oct/18/inflation-hits-three-year-high
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