Inflation: UK prices soar at fastest rate for almost ten years

 The cost of living surged by 4.2% in the 12 months to October, the highest rate in almost 10 years.

It is mainly due to higher fuel and energy prices but the cost of second-hand cars and eating out also rose, the Office for National Statistics said.

Inflation is up sharply since Covid restrictions ended this summer and the economy reopened.

The Bank of England says it may have to raise interest rates in the "coming months" to tackle the surging prices.

October's reading is far higher than the 3.1% rise recorded in the year to September and more than double the Bank's target of 2%.

Grant Fitzner, chief economist at the ONS, said: "Inflation rose steeply in October to its highest rate in nearly a decade.

"This was driven by increased household energy bills due to the price cap hike, a rise in the cost of second-hand cars and fuel as well as higher prices in restaurants and hotels.

"Costs of goods produced by factories and the price of raw materials have also risen substantially and are now at their highest rates for at least 10 years."

Why are prices rising?

Demand for oil and gas is pushing up energy prices worldwide. This means higher bills for householders and for businesses, many of whom will pass on some or all of the extra energy costs to their customers

Shortages of many goods, including building materials and computer chips, are causing supply problems and pushing up prices

Government support to businesses during the pandemic - like reduced VAT for hospitality - has ended

Businesses are struggling to recruit lorry drivers and hospitality staff. This is partly due to the pandemic, but is also compounded by Brexit, according to international policy forum the OECD.