Governor of the Bank of England Mark Carney says inflation is yet to peak despite reaching its highest level in five-and-a-half years of 3% in September.

A full percentage point above the Bank’s 2% target, this reading is widely seen as increasing the chances of an interest rate rise
on 2 November.

As well as putting Carney and his colleagues under pressure, the increase in inflation will also be uncomfortable for consumer facing industries like retail and leisure.

The news on inflation could be good news for pensioners as under the ‘triple lock’ guarantee the state pension rises in April by whichever number is highest out of the September inflation number, average earnings or 2.5%.

Inflation figures have also historically been used to determine ISA allowances. Chancellor Philip Hammond will be watched closely when he delivers his Budget on 22 November to see if there will be an increased limit.

Speaking to MPs on 17 October, Carney attributed the surge in inflation entirely to the fall in the pound and sterling slipped further as he noted a ‘no-deal’ Brexit was a threat to financial stability in Europe.

Chief EU negotiator Michael Barnier recently warned talks over a post-Brexit settlement were in ‘deadlock’. (TS)