UK Oct. inflation rises to 3.2%

Inflation in the U.K. rose during October, mainly pushed by fuel and lubricant prices and continued to remain above the 2 percent target set by the Bank of England, said a report from the U.K. Office for National Statistics.

Consumer price index annual inflation was 3.2 percent in October, and continued to be above the target of 2 percent for the eighth consecutive month.

Analysts were expecting the prices to remain steady at 3.1 percent, according to Reuters.

Prices of fuel and lubricants rose 1.8 percent between September and October, the report stated.

The report is a cause for concern as it still remains above the Bank of England's target of 2 percent. Mervyn King, the Governor of the Bank of England (BoE), is expected to write a letter to U.K.'s finance minister George Osborne, explaining why the CPI continues to remain over the target.

The BoE has kept interest rates constant at 0.5 percent for the past several months in an attempt to contain inflation. Members of the MPC are split over the policy and interest rates.

Last week, the BoE had stated that the CPI is likely to stay above the percent target for 2011, given the forthcoming rise in VAT and continuing increases in import prices.

Prices of games, toys and hobbies rose 1.9 percent this year, compared to an increase of 0.4 percent a year ago.

The main upward effect this year came from computer games bought on the high street, (rather than via the internet) where prices rose sharply, the report stated.

However, food prices fell during the month, due to downward pressures from vegetables and meat.