Inflation up to a 41-year high of 11.1%
An increase in energy bills was a big part of it
Last updated 16th Nov 2022
Big increases in our energy bills have led to the highest level of inflation in the UK for 41 years according to official figures.
The Office for National Statistics (ONS) revealed that inflation jumped to 11.1% in October – the highest rate since October 1981 and up from 10.1% in September – as gas and electricity costs rocketed, despite Government support limiting the rise in bills.
The ONS said gas prices have leaped nearly 130% higher over the past year, while electricity has risen by around 66%.
Families were also hit by rising costs across a range of food items, which also pushed up the cost of living to eye watering levels.
The jump in inflation – the biggest leap since March to April when Ofgem’s energy price cap was last changed – comes despite the Government energy support, which has sought to limit annual household gas and electricity bills at around £2,500 a year.
Chancellor Jeremy Hunt blamed the impact of the pandemic and Vladimir Putin’s war in Ukraine for the spike in prices as he warned that “tough” decisions on tax and spending would be needed in Thursday’s autumn statement.
“The aftershock of Covid and Putin’s invasion of Ukraine is driving up inflation in the UK and around the world,” he said.
“This insidious tax is eating into pay cheques, household budgets and savings, while thwarting any chance of long-term economic growth.
“It is our duty to help the Bank of England in their mission to return inflation to target by acting responsibly with the nation’s finances. That requires some tough but necessary decisions on tax and spending to help balance the books.”
Other new figures from the ONS confirmed fears that the cost-of-living crisis is being felt more acutely by low income households, with latest analysis showing that those families suffered annual inflation of 11.9% last month, while the rate stood at 10.5% for high income households.
“Rising energy and food costs have more bearing on the inflation rate experienced by low-income households, as a greater proportion of their expenditure is spent on them compared with high-income households,” the ONS said.
The data showed the rate of inflation across food and non-alcoholic drinks hit 16.4% in October – the highest since September 1977.
Families were hit by soaring costs of staple foods, such as milk, cheese and eggs, while there were also hefty hikes across everyday items such as sugar, tomato ketchup and jam.
Cost of living crisis
Interest rates and inflation go up
Inflation rose by 8.8% in the 12 months to January 2023, down from 9.2% in December 2022. With interest rates also rising to 4%, those saving money will earn more interest on their finances, whilst those paying mortgages would pay more interest to the bank.
Energy bills
The price of energy went up incredibly as the cost of living crisis hit, with the gas price spike caused largely by the war in Ukraine. The price cap - which is set by an independent regulator to help offset costs onto customers - was set to rise to ÂŁ3,549 for an average home in October but a price freeze from the government restricted the typical bill to ÂŁ2,500. That's still an increase of 27% from the previous energy cap and as it's a cap on unit cost, the more energy you use the higher your bill will be.
Food prices
The cost of a weekly shop also has gone up as a result of the cost of living crisis. As a result of the war in Ukraine, a number of products including cooking oils and wheat have been disrupted. This means that several products are now considerably more expensive, driving bills up for customers.
Prices at the pumps
The average cost of petrol has also rose to unprecedented levels. Supply lines for petrol have been thrown into doubt as a result of the war in Ukraine, as Russia is a large export partner for gas, oil and fuel. In April 2022, the average price for a litre of petrol on the forecourt was 160.2p, whilst a litre of diesel would cost 170.5p. By late June 2022 the price had risen to an average of 190.9p for a litre of unleaded and 198.9p for a litre of diesel. In March 2023 the price wass on average of 147.03 in petrol and 167.04 in diesel.
Average cost of filling up a car with petrol hits ÂŁ100
On 9th June 2022, the average cost of filling up a car with petrol hit ÂŁ100 for the first time ever. Diesel had already hit that milestone. It comes as the cost of fuel hit a record high of one pound eighty a litre. The 2p rise was the biggest daily jump in 17 years. Prices have dropped by at least 20p per litre since the high point.