Inflation jumps to highest level in almost two years

Inflation has jumped to a near two-year high as the rising cost of clothes, restaurants and hotels pushed up the cost of living.

Consumers saw prices rise at the fastest pace in almost two years last month. Picture: John Devlin

The consumer prices index (CPI) measure of inflation hit a higher-than-expected 1 per cent in September – the same level as November 2014 and up from 0.6 per cent the previous month. Economists had pencilled an increase to 0.9 per cent.

The Office for National Statistics (ONS) said there was “no explicit evidence” that sterling’s slump following the Brexit vote had pushed up prices of consumer goods. The value of the pound has fallen almost 20 per cent against the US dollar since Britain voted to leave the European Union.

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The retail pricess index (RPI) – a wider measure of inflation that includes housing costs – rose to 2 per cent last month, up from 1.8 per cent in August.

Mike Prestwood, head of inflation at the ONS, said: “CPI inflation has risen to its highest for nearly two years, though it remains low by historic standards.

“The prices paid by manufacturers for raw materials were unchanged over the month and there is no explicit evidence the lower pound is pushing up the prices of everyday consumer goods.”