After a three-year low in September, British inflation started to rise again in October, driven by a rise in energy prices which is worrying the poorest households as winter approaches.
This indicator rose to 2.3% year-on-year last month, more than economists' expectations. Inflation, which had fallen to 1.7% the previous month, returned to a level not seen since April, according to data published Wednesday by the National Statistics Office (ONS).
Price increases were fueled last month by the increase in the energy cap which “resulted in an increase in gas and electricity costs” in the country, explained on the social network X Grant Fitzner, chief economist at the ONS.
Energy bills in the United Kingdom, which had fallen since the peaks reached after the start of the war in Ukraine, actually started to rise again in October: Ofgem, the sector regulator, increased the energy bill by 10%. capped gas and electricity bill for an average household.
The regulator sets this ceiling every quarter, which is supposed to take into account developments on international markets and guarantee the most appropriate price for both suppliers and consumers.
He is due to announce on Friday the new cap which will apply from January – which is expected to rise further slightly, according to estimates from energy consultancy Cornwall Insight.
“The current cold snap is already having devastating consequences on the most vulnerable people” with “unaffordable energy bills and much less help available nationally this winter”warned the association fighting energy poverty NEA on Monday.
“Cost of living”
“We know that families across (the country) are still struggling to meet the cost of living”reacted in a press release Darren Jones, Chief Secretary of the British Treasury.
The budget presented at the end of October by the government, made up of colossal tax increases (notably employer contributions) and exceptional loans, also provides for “to increase the minimum wage, to freeze fuel taxes” while avoiding “to increase taxes on working people”he assured.
Salary increases in the public sector and that of the minimum wage “should help mitigate the immediate effects of rising prices for some”recognizes Sarah Coles, analyst at Hargreaves Lansdown.
But these wage increases “could end up fueling higher prices in the long term, triggering a new wave of inflation”she warns.
Generally speaking, economists believe that inflation will continue to rise in the short term, remaining above the 2% target set by the Bank of England (BoE).
The British have suffered the full brunt of very high inflation in recent years, peaking at 11.1% in October 2022 before falling steadily since.
The BoE had raised its key rate since the end of 2021 to combat this surge in prices, which has resulted in more expensive credit costs (notably mortgage loans) for both individuals and British businesses.
Faced with falling inflation, it has already lowered its rate twice since the start of the year, but the rebound in October “will argue in favor of Bank of England prudence” for future rate hikes, according to Ruth Gregory, analyst at Capital Economics.
