Tuition fees push up inflation

INFLATION rose 0.5% in October fuelled by escalating university tuition fees, latest data showed today.

The Office for National Statistics said the Consumer Prices Index (CPI) increased to 2.7% last month – higher than many observers were expecting.

“The main upward pressure came from the education sector (university tuition fees) with smaller upward contributions from food & non-alcoholic beverages and transport,” said the ONS.

University tuition fees have almost trebled this year after the Government lifted the cap to £9,000.

The CPI figure was tempered slightly by downward pressures on housing & household services, recreation and miscellaneous goods & services but the steep rise overall will be disappointing for the Bank of England and Governor Sir Mervyn King will once again have to write to the Chancellor explaining what measures he plans in order to get the figure back in line with the Government’s target of 2%.

The Retail Prices Index (RPI) rose by even more – up 0.6% on September (2.6%) to 3.2%. The ONS said the main contributors to the change were the same as for the CPI.