Summary

  • The latest UK inflation figures show prices have risen 11.1% in the year to October, up from 10.1% the previous month

  • Energy bills and the cost of food - especially basics like low-fat milk, pasta and butter - are the main things pushing up the cost of living

  • The UK is seeing its highest inflation for 41 years, a figure not seen since October 1981

  • But prices are rising even faster for the poorest households - by more than 16% for the families who spend the least

  • The rising cost of living has been driven partly by energy costs and the Ukraine war but also factors such as the cost of raw materials

  • It all comes a day before Chancellor Jeremy Hunt announces tax changes and spending cuts in the Autumn statement, with warnings of a UK recession to come

  • BBC News is in Gloucester today hearing how people are coping with the spiralling cost of living and economic pressures

Live Reporting

Edited by Heather Sharp

  1. What can be done to tackle inflation?

    The Bank of England has a target to keep inflation at 2%, but current price increases are about five times that.

    Its traditional response to rising inflation is to raise interest rates. This can encourage people to save, but means some people with mortgages see their monthly payments go up.

    Raising interest rates also makes borrowing more expensive and - it is hoped - people have less money to spend. As a result, they will buy fewer things and prices will stop rising as fast.

    In November, the Bank increased rates by 0.75 percentage point to 3%, the highest level since 2008, when the UK banking system faced collapse. Its next interest rate decision will be on 15 December.

    But when inflation is caused by things like rising energy prices worldwide, there is a limit as to how effective UK interest rate rises can be in slowing inflation.

  2. Why are prices rising so fast?

    Graph showing inflation at 10.1%.

    Energy bills are one of the biggest contributors to inflation currently, as oil and gas prices remain at elevated levels in part due to the war in Ukraine.

    Russia is one of the largest exporters of oil and gas but as countries have moved to reduce their reliance on Russian imports, demand for other producers has risen, leading to higher prices.

    The war has also contributed to increases in petrol, diesel and food prices.

    Russia and Ukraine are some of the biggest producers in agriculture and food globally and the invasion and subsequent sanctions have disrupted supplies.

    There have also been significant increases in the costs of raw materials, household goods, and furniture, and in the hospitality sector, including restaurants and hotels.

    And higher interest rates are making mortgage payments more expensive for some homeowners.

    Read more here.

  3. Welcome to our live coverage

    Good morning, and welcome to our cost of living and inflation coverage.

    At 07:00 GMT, we’ll get the latest figure on just how fast prices are rising in the UK when fresh numbers are released by the Office for National Statistics.

    Inflation hit 10.1% in the UK in the 12 months to September, with prices rising at their fastest rate for 40 years.

    In response, the Bank of England has increased interest rates by 0.75 percentage points to 3%, the biggest hike in more than three decades.

    As part of our ongoing Cost of Living: Tackling It Together coverage, BBC News is asking people from towns and cities around the UK how they are coping. Today we are in Gloucester, one of 12 different locations that we will be visiting to speak to households, businesses and families to find out how the rise in living costs is affecting you.

    Stay with us as we bring you the latest.