"Inflation is probably going to be above target all of next year and there's a chance it may go above 3 percent"
- Alan Clarke, an economist at Scotiabank Europe Plc
Consumer prices in the U.K. accelerated more than was initially expected, boosted by the jump in university tuition fees and food prices. The Office for National Statistics said the U.K. inflation rate rose to the highest level since May, reaching 2.7% in October, compared to 2.2% the month before. In the meanwhile, education costs soared 19.1% after the government tripled fees to up to 9,000 pounds ($14,300) per year.
"Inflation is probably going to be above target all of next year and there's a chance it may go above 3 percent. That's unfortunate for consumers, and it makes it harder for the Bank of England to deliver more stimulus," said Alan Clarke, an economist at Scotiabank Europe Plc in London.
"They are a little bit disappointing, higher than expected, above the range. Ironically, we had the tuition fee increases that are roughly what we expected and the surprise for us was the extent of the food price increase," Ross Walker, UK economist at RBS, said Tuesday.
The FTSE 100 Index edged higher 0.33 per cent to 5,786.25. The broader FTSE All-Share Index increased 0.26 per cent to 3,020.45.
© Dukascopy Bank SA