Recent data has shown that inflation in the UK has risen for the first time since February. CPI, where the Bank of England has a target rate of 2%, rose to 1.5% in October from 1.1% in September. The RPI measure also rose in October to -0.8% from -1.4% in September.
The rise in inflation was not unexpected and the Bank of England had already warned that this would take place towards the end of this year while most analysts also predicted that the inflation rate would start to climb. The main reason behind the sharp rise is that fuel prices fell by a lot less than they did in the same period in 2008. In fact, the Office of National Statistics (ONS) stated that monthly fuel costs fell by just 0.7% in October compared to 6.1% last year. The record fall in 2008 was owing to the sharp decline in the oil price at the time. Although RPI remains negative...
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