Inflation still set to climb this winter, putting more pressure on living standards

The cost-of-living crunch is just beginning, Anna Isaac writes

Prices are likely to keep climbing in the months ahead, economists believe (PA)

Higher inflation is not going away just yet. If policymakers hoped that new data would avoid a tough call on an interest rate rise as soon as next month, they will be disappointed.

Prices grew by 3.1 per cent in the 12 months to September — only a slightly weaker reading from the same period to August, even with the Eat Out to Help Out scheme distorting the picture. The policy caused a sudden fall in prices for food and drink, and then rise once the discount ended.

Estimates that inflation might climb above four per cent still stand. That means a difficult decision for the Bank of England. Its policymakers risk weakening growth with a hike or letting price rises eat into living standards by failing to curb inflation.