Cost of living soars to 41-year high

Energy costs, the war in Ukraine and the rising cost of raw materials are blamed this morning for pushing the cost of living to a 41-year high of 11.1 per cent.

The latest Office for National Statistics (ONS) figures for inflation in October led to further speculation that the UK will enter a recession at the end of the year.

They show that prices rose by 11.1 per cent in the year to October, as higher energy bills drove inflation, which measures how the cost of living changes.

Higher energy and food bills have caused businesss and households to cut back on spending.

The announcement comes the day before new Chancellor Jeremy Hunt announces tax changes and spending cuts in the Autumn statement in an attempts to bring inflation under control.

He blamed "the aftershock of Covid and Putin 's invasion of Ukraine" for driving up inflation in the UK and around the world.

Mr Hunt said that he would have to take "tough but necessary decisions" on tax and spending to bring down debt and support sustainable growth while protecting the most vulnerable.

The latest inflation figure of 11.1 per cent is the highest since October, 1981.

This comes despite the government's introduction of the Energy Price Guarantee, which provides support to households in England, Scotland and Wales for their bills through to April.

But the ONS estimated that without the bills help, the inflation figure would have gone as high as 13.8 per cent.

Food and non-alcoholic drinks also had a big increase, with costs up 16.4 per cent in the year to October.

Raj Kandola, head of policy at Greater Birmingham Chambers of Commerce, said: "This morning's CPI results came in higher than expected and confounded many city analysts ' predictions as the rate of inflation hit a 41-year high.

"The cost of living crisis continues to bite for households and businesses alike as the fallout from the Ukraine crisis means production costs are soaring for many firms across the country.

"We're seeing a similar picture locally as well - early analysis from our latest Quarterly Business Report reveals the huge price pressures firms are facing across the region are currently facing.

"All eyes will now turn to the Bank of England and what they deem as an appropriate response from a monetary policy perspective.

"If anything, today's results intensify the pressure on the Chancellor to use this week's Autumn Statement to reduce the huge overheads businesses are dealing with and get a grip on spiralling costs."

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