What's going on?

Data out on Wednesday showed that the UK’s inflation broke double digits again last month.

What does this mean?

Hard-pressed Brits might’ve hoped their luck was about to change when rapidly rising prices started slowing down back in August. But new data out on Wednesday signals inflation shows no sign of letting up: food prices rose by 15% from last year, their biggest uptick for decades, while furniture and other household goods prices were up 11%.Those increases were big enough to completely dwarf some well-needed let ups in prices for petrol and second hand cars, and meant consumer prices overall still rose 10.1% in September from the same time last year, matching this July’s 40-year high.

Why should I care?

For markets: The Bank of England’s back for more.
Now that the government’s done a U-turn on its chaos-inducing tax cuts, the Bank of England (BoE) will be able to focus its energy on tackling inflation. That’ll probably involve bringing out the big guns, especially in light of September’s inflation data: in fact, some economists think a 0.75 percentage-point interest rate hike is on the cards next month. That’s on top of the BoE’s announcement this week that in November it will start selling some of the nearly $1 trillion worth of government bonds it amassed while supporting the economy over the years. That should drive bond prices down, push up their yields, and further increase the overall cost of borrowing.

Zooming out: Nice one, Nestlé.
You can thank Nestlé for some of those rising food prices. The world’s biggest food maker said that it upped its prices by a hefty 9.5% last quarter versus the same time in 2021, in a bid to limit increasingly pricey ingredients and transport costs eating into its profit. But consumers’ wallets will only take so much, with Nestlé revealing it sold a lower volume of goods as a result.