Inflation came very close to the 2% target in September, falling to 2.2%. But now it has moved further away again, rising to 2.7% in October. RPI inflation increased from 2.6% to 3.2%. University tuition fees were the main reason.
Inflation measures adjusted for tax changes also rose - CPI inflation excluding indirect taxes rose from 2.1% to 2.7%, while CPI inflation at constant tax rates went up from 2% to 2.4%. It may be some time before we see inflation back to target.
According to the Office for National Statistics:
•The Consumer Prices Index (CPI) annual inflation stands at 2.7 per cent in October 2012, up from 2.2 per cent in September. The main upward pressure came from the education sector (university tuition fees) with smaller upward contributions from food & non-alcoholic beverages and transport. These were partially offset by downward pressures from the housing & household services, recreation and miscellaneous goods & services sectors. The CPI stands at 124.2 in October 2012 based on 2005=100
•The Retail Prices Index (RPI) annual inflation stands at 3.2 per cent in October 2012, up from 2.6 per cent in September. The largest upward pressure came from university tuition fees, followed by food and housing. Fuel & light provided the largest downward pressure. The RPI stands at 245.6 in October 2012 based on January 1987 = 100