UK inflation hits 41-year high before key budget

STORY: Surging food and energy prices are driving inflation ever higher in the UK.

Figures out Wednesday (November 15) showed prices rising at 11.1% over the year to October.

That’s a 41-year high, and worse than economists had forecast.

It's also a full percentage point up on the month before.

Statistics office officials said the figure would have been nearer 14%, had the government not moved to cap energy bills.

The news comes a day before finance minister Jeremy Hunt unveils critical tax and spending plans.

Responding to the data, he said “tough but necessary” decisions were required.

His Thursday (November 16) budget is expected to see a mix of tax hikes and spending cuts.

It’s meant to restore confidence in UK policymaking and public finances after the short-lived premiership of Liz Truss.

The inflation numbers will make uncomfortable reading for the Bank of England.

Analysts say they will ramp up pressure for more big interest rate hikes.

At its last policy meeting the bank had said rates might not have to rise too much to bring inflation back down.

One JPMorgan analyst predicted rates would now peak at 4.5%, up from 3% today.