UK Inflation Rate Up over Target

LONDON, Nov 13 (Reuters) - Britain's inflation rate rose more than expected last month and above the central bank's 2.0 percent target for the first time since June on higher petrol and food costs, official data showed on Tuesday.

The Office for National Statistics said consumer prices rose 0.5 percent in October, taking the annual rate up to 2.1 percent from 1.8 percent in September. Analysts had predicted a 1.9 percent annual rise.

With food and energy prices still rising and factory gate inflation at a 12-year high, there is a risk inflation will climb further and the figures are likely to dent expectations that the Bank of England is about to cut interest rates.

The central bank held borrowing costs at a six-year high of 5.75 percent last week and will publish on Wednesday its new quarterly inflation forecasts.

Many analysts expect an interest rate cut to 5.5 percent early next year given a weaker outlook for the economy in the wake of financial market turbulence.

The ONS said the chief culprit for the rise in inflation was higher petrol costs which added 0.29 percentage points to the annual rate. Food price inflation, particularly meat and fruit, added 0.12 percentage points.

Since October, oil prices have neared $100 a barrel and wheat prices have remained high. British food maker Premier Foods said on Monday it was raising bread prices for the second time in three months.

The ONS said the biggest downward impact came from household bills as gas and electricity prices continued to come down after huge increases last year. The cost of electricity, gas and other fuels fell by 4.0 percent on the year, the biggest decline since August 1998.

The retail price index -- on which many wage deals are based -- also rose more than expected, with prices up 4.2 percent on the year.