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English tuition fees fuel inflation

ANNUAL UK consumer prices index (CPI) inflation leapt from 2.2% in September to 2.7% in October as the Coalition Government's hike in maximum annual undergraduate tuition fees for new UK and European Union students in England, to £9000, sent education prices soaring.

Surging university tuition fees represented the largest contributor to the rise in annual inflation, the Office for National Statistics said.

Overall education prices surged 19.1% month-on-month in October. The ONS noted this was more than twice the next-biggest monthly rise in education prices since comparable records began in 1996.

A 0.5% rise in overall food and non-alcoholic beverage prices in October, which contrasted with a 0.9% fall in the same month of 2011, also contributed to the rise in annual CPI inflation.

The City had forecast annual CPI inflation of 2.3% for October.

Samuel Tombs, UK economist at consultancy Capital Economics, noted that the "rise in global food prices earlier this year has begun to feed through to the shops".

However, he added: "We still think that the weakness of economic activity will bring inflation down again in time, potentially to a very low rate."

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