Propertymark says it’s disappointed with the surprise rise in inflation – but insists it’s likely to fall in the relatively near future.

Inflation rose sharply to 2.3% in October after a hike in energy prices. Economists had forecast a rise to 2.2% after a three-year low of 1.7% in September.

The rise effectively rules out any further interest rate fall in the near future. Markets had priced in a 22% chance of another Bank of England rate cut to 4.5% in December but this has dropped to 16% following the release of the new inflation data.

A cut to 4.75% was announced earlier this month but the Bank of England has been at pains to emphasise the base rate will come down gradually as it monitors the path of inflation.

Nathan Emerson, CEO at Propertymark, comments: “It is disappointing to see that inflation has increased considering the overall trend throughout the year. 

“However, there are many national and global factors that impact the UK economy, hopefully inflation will better stabilise, and the UK economy should continue to adapt, no matter what happens in response to national and international events. 

“With housing playing a vital role in the growth of the economy, over time it would be positive to see interest rates drop to levels not seen since 2019, in order that more people can afford to enter the housing market for the first time, or make their next all-important home move.” 

So-called under-the-radar inflation data also came in higher than expected.

Core inflation, which strips out volatile energy and food prices, was 3.3% in October – up from 3.2% and higher than the forecast 3.1%.

And Services inflation was up 0.1% to 5% – a static figure of 4.9% had been forecast.