Inflation rises to surprise 3.2% in October

Annual consumer prices inflation (CPI) rose in October to a four-month high of 3.2%, up from 3.1% in September and higher than the 3.1% economists expected.

Petrol; financial services; and games and toys were the most significant drivers of the rise, while downward pressure came from food prices. However, annual retail prices inflation (RPI) stood at 4.5% in October, down from 4.6% the previous month. Core inflation was stable at 2.7% in October. The rise in inflation will prompt Bank of England governor Mervyn King to write another explanatory letter to Chancellor George Osborne. Howard Archer, chief UK and European economist at IHS Global Insight, says the BoE will not be happy with the rise, which keeps inflation more than one perc...