Inflation has soared back up again, hitting 10.1% in September.
It's currently at a 40-year high, and is five times higher than the Bank of England target of 2%. This highlights how the ongoing cost of living crisis is putting pressure on families, and it's also the reason why interest rates have been hiked.
The consumer prices index (CPI) measure of inflation is used to explain how much the prices have increased over a period of time, the Mirror reports.
But will it ever drop back down, and how does inflation affect our money?
Here's everything you need to know.
Why is inflation going up?
Inflation figures are published by the Office for National Statistics (ONS) every month, showing how prices change over the course of the year.
The ONS said rising food and energy prices were the biggest causes of inflation hitting 10.1% in the 12 months to September.
Food and non-alcoholic beverage prices rose by 14.5% in the 12 months to September 2022.
As well as this, energy prices have also soared, with many UK households now paying double what they were last year.
And it was recently confirmed by the government that the Energy Price Guarantee, which was supposed to last for the next two years, will be cut in April 2023.
At the moment, energy bills for the typical household have been 'frozen' at £2,500 a year - although this isn't an absolute cap on your bill.
Experts now say the energy price cap could hit between £4,347 and £5,000 in April, with the Bank of England saying Russia's invasion of Ukraine is one of the main causes of rising prices.
What things are rising in price the most?
Here’s a breakdown of all the different elements that drove UK inflation up to 10.1%:
-
Food and non-alcoholic beverages: 14.5%
-
Alcoholic beverages and tobacco: 5.5%
-
Clothing and footwear: 8.5%
-
Housing, water, electricity, gas and other fuels: 20.2%
-
Furniture, household equipment and maintenance: 10.7%
-
Health: 3.5%
-
Transport: 10.6%
-
Communication: 2.4%
-
Recreation and culture: 5.2%
-
Education: 4.3%
-
Restaurants and hotels: 9.7%
-
Miscellaneous goods and services: 5%
ONS director of economic statistics Darren Morgan said: "The rise was driven by further increases across food, which saw its largest annual rise in over 40 years, while hotel prices also increased after falling this time last year.
"These rises were partially offset by continuing falls in the costs of petrol, with airline prices falling by more than usual for this time of year, and second-hand car prices also rising less steeply than the large increases seen last year.
"While still at a historically high rate, the costs facing businesses are beginning to rise more slowly, with crude oil prices actually falling in September."
Will inflation keep going up?
The Bank of England has said it expects the inflation rate to peak at 11% later this year.
It's likely it will then remain at above 10% for a couple of months before starting to come down.
But the Bank admits: "Even though the rate of inflation will slow down, the prices of some things may stay at a high level compared with the past."
The Bank said previously that it could take two years before inflation returns to its target level of 2% a year.
What does rising inflation mean for my money?
When inflation goes up, it means you don't get as much for your money as you did previously - for example, if something cost £1 a year ago and the rate of inflation is 10%, it would now cost £1.10 today.
If the base rate of 2.25% keeps rising, the Bank of England will likely keep hiking interest rates, which has a massive affect on millions of mortgage deals.
If you have a tracker mortgage then your rate will go up when the base rate rises, as these deals move in line with the Bank of England.
If you're on a standard variable rate (SVR) mortgage, then you'll likely see your rates go up as well - but this is down to your lender.
If you have a fixed-rate mortgage, your rates won't change while you're still in your current deal.
Credit cards are not usually linked to the base rate - but they have been going up over time regardless as borrowing becomes more expensive.
But if you need to take out a new credit card or loan, you may find new deals aren't as competitive as they were a year ago.
Are benefits and state pensions affected?
The September level of Current Pricing Index (CPI) inflation is usually used to determine how much the state pension and benefits will rise by the following April.
There is a triple lock promise, which guarantees the state pension rises by the highest of average earnings, CPI inflation and 2.5%.
But this was downgraded to a double lock to avoid a record 8% increase after the pandemic pushed earnings growth higher as workers returned from furlough.
In the last couple of days, the Government has repeatedly refused to say whether it will definitely bring back the triple lock for next April.
If the triple lock guarantee is kept in place, this means the full state pension will rise from £185.15 to £203.85 per week next year.
Don't miss the latest news from around Scotland and beyond - Sign up to our daily newsletter here.
