British inflation rate jumps due to high university fees

LONDON - Agence France-Presse

Shoppers carry shopping bags on Oxford Street in central London. The country’s 2.7 percent inflaiton rate in October exceeded the central bank target. REUTERS photo

Annual inflation in Britain surged to a higher-than-expected rate of 2.7 percent in October largely owing to massive hikes in the country’s university tuition fees, official data showed on yesterday.

The Bank of England’s target rate is set at 2.0 percent.

“The Consumer Prices Index (CPI) annual inflation stands at 2.7 percent in October 2012, up from 2.2 percent in September,” the Office for National Statistics (ONS) said in a statement.

“The main upward pressure came from the education sector (university tuition fees) with smaller upward contributions from food and non-alcoholic beverages and transport,” the ONS added.

A cap on annual tuition fees that universities are permitted to charge undergraduates rocketed to 9,000 ($14,294, 11,278 euros) in October from 3,375 a year earlier.

Analysts’ consensus forecast had been for an increase in 12-month inflation to 2.4 percent, according to a survey by Dow Jones Newswires.

The CPI meanwhile advanced by 0.5 percent in October on a month-on-month basis, the ONS said.

“It is disappointing that inflation increased in October,” the Treasury said in reaction to the latest data, while noting that the rate remained “much lower than its peak of 5.2 percent” in September 2011.