Here’s our full analysis on the jump in UK inflation to 2.3%, back above the Bank of England’s target, from 1.7% in September. Higher energy bills were the main culprit, while food inflation also rose.

Unite, the UK’s biggest union, is calling for “serious action” to tackle the cost of living crisis.

Unite general secretary Sharon Graham said:

With inflation rising again, we need some serious action to tackle the root causes of the cost-of-living crisis.

For a start, that means taking on the profiteers who have driven sky high prices and bringing the energy system back into public hands.

Financial markets now see the probability of a rate cut at next month’s Bank of England meeting at around 16%.

Bank of England governor Andrew Bailey yesterday stressed that the central bank was pursing a “gradual approach” to reducing borrowing costs from their current level of 4.75%, allowing time to assess the impact of the tax changes in last month’s budget. He said:

A gradual approach to removing monetary policy restraint will help us to observe how this plays out, along with other risks to the inflation outlook.

Here’s some instant analysis from our new economics editor Heather Stewart, who has just taken over from Larry Elliott. She writes:

Any lingering hope that the Bank of England might deliver a pre-Christmas interest rate cut next month appears to have evaporated, after official data showed inflation jumping to 2.3% in October.

The CPI measure had been expected to tip up, after dipping to 1.7% in September, but 2.3% was stronger than expected.

September’s reading was the first time inflation had fallen been below the Bank’s 2% target since July 2021, and looks likely to be the last for some time.

Much of the explanation lies in energy prices, with Ofgem’s price cap rising from October – in contrast to the same period last year, when utility bills were falling rapidly from the peak hit in the wake of Russia’s invasion of Ukraine.

Electricity prices rose by 7.7% in October, the ONS said, having fallen by 7.5% last year. Gas prices increased by 11.7% in October, compared with a 7% drop last year.

Economists were quick to suggest that the stronger-than-expected rise confirmed expectations that the Bank’s monetary policy committee (MPC) will wait until the new year before going further, after cutting rates to 4.75% earlier this month.

Donald Trump’s arrival in the White House is also giving policymakers pause: if he presses ahead with across-the-board tariffs, the short-term impact at least is likely to be inflationary.

The Conservatives have responded to the inflation figures.

Mel Stride, shadow chancellor, said:

Having brought inflation back down to target, we know how important it is for all of us that the government does the same.

What is worrying about today’s announcement is that inflation is running ahead of expectations and official forecasts state these figures are not expected to improve. Labour’s budget will push up inflation and mortgage rates.

And here is Monica George Michail, associate economist at the National Institute of Economic and Social Research:

Ruth Gregory, deputy chief UK economist at Capital Economics, said:

Much of this overshoot in core inflation and services inflation was due to a sharp rise in airfares inflation, which the Bank won’t consider a sign of stickier price pressures.

Airfares inflation snapped back from -5.0% to +6.6%, partly due to the biggest monthly rise in airfares in October since monthly collection began in 2001. So just as some of the downside news on services inflation in September was due to volatile factors, some of the upside surprise in October looks like noise too. What’s more, the Bank of England had expected services inflation to nudge up to 5.0% in October, so today’s release won’t be too much of a blow.

Even so, October’s data may mean that the rebound in CPI inflation over the coming months (due to unfavourable base effects in clothing, cars and recreation/culture) may take inflation further above the 2.7% we had been forecasting for January. That will strengthen the case for caution at the Bank of England.

And it suggests that, barring a major downside surprise in November’s inflation data, the Bank will almost certainly leave rates unchanged at 4.75% at its next meeting in December.

The stronger than expected inflation figures dampened hopes of imminent interest rate cuts from the Bank of England.

Services inflation – closely watched by the central bank – rose from 4.9% to 5%.

Core inflation, which strips out volatile items like food and energy, also defied forecasters, rising from 3.2% to 3.3%.

Luke Bartholomew, deputy chief economist at abrdn, said:

Headline inflation was always going to pop up again given energy price effects, but the slightly larger than expected increase reported today is somewhat disappointing. In particular, services inflation, which is closely watched by policymakers as a sign of underlying inflation pressures, was stronger and still well above an inflation-target consistent rate, albeit broadly in line with the Bank of England’s forecasts.

Headline inflation is likely to drift further above target for the next few months, but it is the fundamental determinants of inflation that will determine the path of interest rates from here. And with the budget set to boost growth and inflation next year, there is little reason for the Bank to deviate from its only gradual rate cutting schedule any time soon. So we continue to expect the next rate cut early next year.

Simon French, chief economist and head of research at investment bank Panmure Liberum, said on X: