Inflation strayed above the Bank of England’s target level of 2 per cent in October, reaching 2.3 per cent.

Data from the Office for National Statistics found the consumer price index rose by 2.3 per cent in the 12 months to October, an increase from the 1.7 per cent recorded in September.

On a monthly basis, CPI rose by 0.6 per cent last month, up from seeing little change in October 2023.

The largest contributor to this change in CPI annual rates came from housing and household services, specifically electricity and gas prices.

Hargreaves Lansdown head of personal finance, Sarah Coles, said: “This month’s unwelcome return above the inflation target is unlikely to be a one-off: inflationary pressures look set to keep prices rising more quickly.

“The good news is that public sector pay rises and the rise in the minimum wage should help ease the immediate pain of higher prices for some people.

“The bad news is that this could end up feeding into higher prices further down the line, spurring another round of inflation.

“The energy price hike at the start of October bears much of the responsibility for this rise in inflation. It’s not a surprise.

“The energy price cap soared 9.5 per cent at the start of October, to £1,717 for an average user. That’s up £149.

“Things have been far worse in the very recent past: gas prices are still 36 per cent below their peak and electricity is down 22 per cent.

“However, prices are still horrible compared to their levels before the invasion of Ukraine. Gas prices are up 88 per cent from March 2021 and electricity is up 56 per cent.”

A similar rise was also experienced by the consumer prices index including owner occupiers’ housing costs which increased by 3.2 per cent in the 12 months to October 2024, up from 2.6 per cent in September.

Similarly, core CPI rose by 3.3 per cent in the year to October, up slightly from 3.2 per cent in September.

However, despite the recorded increases, Evelyn Partners chief investment strategist, Daniel Casali, argued that the rise is unlikely to affect the Bank of England’s interest rate decision.

“The BoE expects inflation to accelerate to a cyclical peak of 2.8 per cent by the third quarter of 2025 before slowing to 1.8 per cent by the end of 2027,” he explained.

“Overall, despite some concerns about pockets of inflation, this is unlikely to stop the BoE from cutting interest rates.”

Casali additionally stated: “For investors, gilt yields have adjusted upwards to reflect a potentially slower approach by the BoE in cutting interest rates.

“Other factors such as increased issuance post the Budget have also put upward pressure on gilt yields.

“Nevertheless, short-term two-year gilt yields of around 4.2 per cent look relatively attractive given the uncertain outlook for the UK economy.”