Inflation increases by more than expected to reach 11.1% in October

Kevin Brown, savings specialist at Scottish Friendly, comments:

Prices are now rising faster than they have since December 1981 due to the cost of fuel, food and drink and transport all spiking again last month. It’s a bigger jump than was expected and it will raise fears that inflation has not yet reached its peak. However, there are still some early signs that price increases may soon begin to soften.

Core inflation which excludes energy, food, tobacco and alcohol did not rise in October and remained flat at 5.8%. This provides a small glimmer of hope that the cost-of-living crisis may start to fade slightly sooner than previously expected.

Nonetheless, households are still vulnerable to fluctuating gas and electricity prices and rising mortgage and borrowing costs could offset any reduction families see in other areas next year.

The pressure on households’ disposable income isn’t suddenly going to let up, so it’s important that people try to put away any extra money they do have when the opportunities arise. That might mean saving into cash for easy-access, or if it’s for the future, investing some of it as that at least offers the possibility of above inflation returns.