The Consumer Prices Index (CPI) has surged, marking a significant increase in inflation for October 2024.
- Compared to September, the CPI rose from 1.7% to 2.3%, influenced mainly by rising energy costs.
- This rise breaches the Bank of England’s target, placing inflation at its highest since May.
- Housing and household services largely contributed to the inflation rise, while transportation costs fell.
- Despite the rise, recreation and culture costs provided a slight counterbalance with lower prices.
In October 2024, the Consumer Prices Index (CPI) experienced a notable uptick from the previous month, climbing to 2.3% from 1.7% in September, largely driven by soaring energy prices. This increase signifies a return above the Bank of England’s target inflation rate, marking the highest rate since May and indicating a potential ongoing trend influenced by fluctuating energy markets.
According to data released by the Office for National Statistics (ONS), on a monthly basis, the CPI rose by 0.6%, whereas in October 2023, it had remained relatively stable. The CPI including owner occupiers’ housing costs (CPIH) also reflected this trend, rising by 3.2% over the past 12 months, compared to a 2.6% rise noted in September.
Ofgem highlights that for the average household, this increase equates to an annual energy bill of £1,717, a significant rise of £149. Households are likely to feel this pinch, with the primary contributors being electricity and gas prices. Moreover, the largest upward pressure on inflation in both CPIH and CPI rates stemmed from the housing and household services sector, primarily due to these escalating energy prices.
However, the inflationary pressure was slightly mitigated by decreases in transport costs, which fell by 2.0% over the year to October 2024, slightly improved from a 2.4% fall in September. On a monthly basis, transport costs nudged higher by 0.1%, contrasting with a 0.2% drop recorded a year ago. As noted by Grant Fitzner, ONS chief economist, “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 inflationary trend in October, driven by energy costs, poses challenges amid some downward pressures from sectors like transportation and entertainment.
