UK inflation was extended to a maximum of 0.7% in October.
Inflation rose from 0.5% in September, boosted by rising clothing prices, food and used cars.
Clothing prices rose 2.8%, while food prices rose 0.1% between September and October.
“Inflation rates have risen slightly as clothing prices rise, and after this year’s turmoil, it will return to normal seasonal patterns,” said Jonathan Atow of the National Statistics Office.
“We’ve also tweaked the food costs, but used cars and computer games also rose in prices, which were partially offset by falling energy and holiday costs.”
The cost of used cars was also bordered as people avoided using public transport. ONS said:
“Used car prices rose 1.4% between September and October 2020, but fell 0.2% over the two months of the previous year.
“This upward movement has been ongoing since last month, and is reported due to rising demand for used cars as they seek alternatives to public transport.”
Tom Stevenson, director of private investments at Fidelity International, commented on the latest statistics from the ONS and explained the impact the vaccine has.
“In October, behind slightly higher food, inflation creeped up to 0.7%. Prices are on the upward path, but the rise may be curbed for a while. Symbiotic infections are still rising, with the UK’s large strips under strict lockdown rules, limiting spending opportunities and unemployment climbing. This is not an inflationary recipe that will soon reach the 2% target.
“And more, there’s light at the end of the tunnel in the form of potential vaccines. Reopening the economy will rekindle the animal spirit. The widely debated shift to negative interest rates seems less thought to now, but this is good news for investors. The Bank of England has increased its quantitative easing programme to encourage consumer spending and investment. Now it should keep powder dry.”
