THE Office for National Statistics has reported that the Consumer Price Index – the Government’s target measure – was 3.2% in October, up from 3.1% in September.
It was the eighth month in a row that the CPI has been above 3%.
Business leaders in Birmingham have said they believe inflation will get worse before it gets better.
The largest upward pressures to the change came from fuel and lubricants where prices rose overall by 1.8% between September and October this year compared to a fall of 0.7% a year ago.
This largely reflects a rise of 2.1p per litre in the price of petrol between September and October compared with a fall of 0.8p per litre a year ago.
The rise in fuel prices includes the impact of the increase in road fuel duty, which took effect on October 1.
President of Birmingham Chamber of Commerce Christine Braddock said: “The recent decision to hike VAT to 20% next year by the Coalition Government will undoubtedly keep inflation higher.
“The planned VAT rise and the pound’s depreciation mean that inflation still remains way above the 2% target.
“Interest rates will have to rise at some point, but it is clear that uncertainty remains prevalent so we expect the Bank of England to hold off, for now.”
Financial services also drove the CPI rise where prices fell by less than a year ago.
There were significant reductions in bank overdraft charges and mortgage arrangement fees between September and October last year which have not been repeated this year.
Games, toys and hobbies prices rose by 1.9% compared to an increase of 0.4% a year ago while alcohol and tobacco rose by 0.8% between September and October but fell by 0.2% a year ago.
The largest downward pressure to the change in CPI inflation came from food where there were widespread downward effects, the most significant being from vegetables and meat.
RPIX inflation – the all items RPI excluding mortgage interest payments – was 4.6% in October, unchanged from September.
