Figure hits eight-year high
Rising prices have driven the retail price index inflation to an eight-year high of 3.6 per cent, which has hammered the 'final nail in the coffin' of interest rates remaining at 4.75 per cent, according to a study.

The monthly report into consumer prices by research firm Capital Economics also said that, although the consumer price index had fallen from 2.5 per cent to 2.4 per cent in September, the core rate of inflation had risen from 1.1 per cent to 1.4 per cent.

This latter rate - which strips out energy, food, alcohol and tobacco - is viewed as a key measure of the health of the UK economy because it reflects consumer spending more closely.

The report concluded that 'a November rate hike to 5 per cent has looked likely for some time, but the rise in core inflation could prove to be the final nail in the coffin'.

However, Capital Economics added that it felt a decision to raise the Bank of England's headline rate of interest to 5 per cent at its November meeting would be 'the last in this mini-cycle'.