U.K. Inflation Continues Rise
LONDON--U.K. inflation hit a greater-than-expected 5.2% in September, propelled by rising gas and electricity bills and leaving hard-pressed Britons suffering bigger price increases than peers in the U.S. and Europe.</br></br>Economists expect inflation to now fall, thanks to easing oil prices and other factors. But the stakes are high as rising costs erode spending power in a consumer-dominated economy and stoke anger at the government.</br></br>The Office for National Statistics said the consumer-price index rose 5.2% in the 12 months to the end of September, above the 4.9% expected by economists, and up from 4.5% in August. That matches a record high reached in 2008 and is more than double the Bank of England's 2% target.</br></br>The ONS said the increased was largely the result of a 13% rise in gas prices and a 7.5% rise in electricity prices. The U.K.'s six biggest energy firms have all pushed up domestic tariffs in response to earlier rises in wholesale gas prices.</br></br>"It's very important right now, because inflation is eroding household income in a country where the consumer accounts for two thirds of GDP," said Alan Clarke, an economist at Scotia Capital. "Many of the energy bills will be landing with a thump onto doormats in January, not great" given the important New Year sales, he said. The rise in costs has outpaced wage gains which, excluding bonuses, climbed by just 1.8% in the three month to August.