Inflation has jumped to a near two-year high as the rising cost of petrol, clothes, restaurants and hotels pushed up the cost of living.
The Consumer Price Index (CPI) inflation hit 1.0% in September, rising from 0.6% in August, and beating economist forecasts of 0.9%.
It marks the highest inflation rate since November 2014.
The Office for National Statistics (ONS) said there was “no explicit evidence” that sterling’s near 20% slump since the Brexit vote had impacted prices
Mike Prestwood, head of inflation at the ONS, said: “CPI inflation has risen to its highest for nearly two years, though it remains low by historic standards.
“The prices paid by manufacturers for raw materials were unchanged over the month and there is no explicit evidence the lower pound is pushing up the prices of everyday consumer goods.”
But others warned the rise was “just the tip of the inflationary iceberg”.
Andrew Sentance, a former Bank of England (BoE) Monetary Policy Committee member, said: “Higher import prices are feeding through to consumers because of the fall in sterling since the EU referendum vote.
Mr Sentance, who is now the senior economic adviser at PwC, predicted weaker sterling would drive inflation above the Bank’s 2% target over the course of next year, adding: “This latest rise, however, is just the tip of the inflationary iceberg which is coming our way.”
Kathleen Brooks, director of research for City Index, said: “The main contributers to rising prices in the UK were clothing, overnight hotel stays and motor fuels. All of this can be traced back to the fall in the pound: oil imports are getting more expensive, clothing imports are also costing more, and the weak pound is boosting the tourism industry, which appears to already be fuelling a rise in hotel prices.
Liz Cameron, chief executive of the Scottish Chambers of Commerce (SCC) said retailers were already expecting prices to increase this year. She added that any measures taken by the BoE to staunch inflation with rises in interest rates could have “negative consequences” for the economy.
“For as long as the inflation rate remains below or around the Government’s 2% target, the effects on our economy will be marginal,” she said.
“However, the danger is that inflation pushes beyond that target, since any monetary measures taken by the Bank of England to rein in inflation could have negative consequences in terms of future growth.
“Rising inflation will complicate an already delicate balancing act for the future growth of our economy.”
The main upward pressure on CPI came from a jump in clothing and footwear price tags – especially women’s clothes – with garments rising 6% between August and September, compared to a 3.3% rise over the same period last year.
Restaurant and hotel prices also increased the cost of living, rising 0.7% between August and September compared to 0.2% last year.
Petrol prices climbed by 1.2 pence per litre month-on-month to 111.2 pence, while diesel prices increased by 1.5 pence per litre to 113.3 pence over the period.