Higher inflation is not going away just yet. If policymakers hoped that new data would avoid a tough call on an interest rate rise as soon as next month, they will be disappointed.
Prices grew by 3.1 per cent in the 12 months to September — only a slightly weaker reading from the same period to August, even with the Eat Out to Help Out scheme distorting the picture. The policy caused a sudden fall in prices for food and drink, and then rise once the discount ended.
Estimates that inflation might climb above four per cent still stand. That means a difficult decision for the Bank of England. Its policymakers risk weakening growth with a hike or letting price rises eat into living standards by failing to curb inflation.
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