Inflation hits two year high of 1% – and is set to continue rising

INFLATION rose to a near two-year high last month — driven by rising prices for clothes and fuel.

September’s rate of one per cent was up 0.4 per cent from August.

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But the fall in the Pound since the Brexit vote had little to do with the figure being at its highest since November 2014.

The Office for National Statistics said there was “no explicit evidence” the weak Pound was increasing prices.

Its head of inflation, Mike Prestwood, said the rate is “low by historic standards”.

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Inflation has moved towards the Bank of England’s target of two per cent.

Governor Mark Carney said last week he was “willing” to let inflation rise above two per cent — and analysts predict it could hit three per cent next year.

Clothes had their biggest monthly jump since 2010, rising six per cent between August and September.

Petrol prices climbed by 1.2p per litre month-on-month to 111.2p.

Inflation can push wages up.

This can benefit mortgage holders, as it means they earn more as their repayments stay the same.

Inflation can also reduce the real value of debt.

The Confederation of British Industry said it expected the Bank of England, to cut the base interest rate next month “to support confidence and spending in the short-term”.

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