Inflation increased by 2.3% in the year to October, the sharpest monthly increase in two years.

The Office for National Statistics (ONS) revealed that consumer prices index (CPI) inflation jumped from 1.7% in September, with core, services and goods inflation all contributing to this rise.

On a monthly basis, inflation increased 0.6% in October, up from being little changed a year previously.

CPI inflation now stands at 0.3% above the Bank of England’s target of 2%.

Head of financial analysis at AJ Bell, Danni Hewson, said: "No one will be surprised that the headline rate of inflation has ticked up again, however unwelcome it might be.

"At 2.3%, inflation is only slightly above the Bank’s 2% target but it does disrupt a three-month downward trend and market expectation of a further interest rate cut in December is now only 16%, with almost half thinking that even February will be too early for the MPC to cut again. The fact that core inflation edged up a touch, with the service sector the most watched part of that equation, will give the nine people on the committee pause for thought."

The largest upward contribution to the monthly change in the CPI annual rate came from housing and household services, which increased by 1.3% after a drop of 0.3% a year previously, due to increases in electricity (7.7%) and gas prices (11.7%).

The largest downward contributor was the recreation and culture sector, which dropped to -0.1% month-on-month.

In this time, air fares remained high, increasing by 6.6% after being the largest contributor to the CPI in August.

Food and drink prices also increased in October for the second time in 18 months, jumping by 0.1%. This was a result of poor harvests in key areas, which has increased the cost of raw materials.

Chief executive officer at Chetwood Bank, Paul Noble, added that the latest data is "untimely" heading into the festive period, but stated that it was not "entirely unexpected" with higher energy costs and price rises in energy sector.

He concluded: "The key question is whether this is just a temporary blip following recent positive inflation news or the start of a new upward trend.

"However, it’s worth bearing in mind that inflation is still markedly lower than it was at the same point 12 months ago and the bank base rate is still above inflation. What’s more, there are strong opportunities in the savings market for those looking to make their money work harder over the festive period and into 2025."

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