Tuition fee hike sends inflation back up again Rise in tuition fees has pushed inflation back up. Spiralling university tuition fees and dearer food bills helped send Britain's annual inflation rate sharply higher last month. Figures released on Tuesday by the Office for National Statistics showed that the 12-monthly increase in the cost of living as measured by the consumer prices index rose from 2.2% to 2.7%, the first upward move since July. Education costs rose by more than 19% in October - the biggest one-month increase on record - as this year's new undergraduates were hit by a near-tripling of tuition fees to £9,000 a year. Britain's wet summer also had an effect on grocery bills, with the ONS blaming a poor vegetable crop for higher food prices. Other measures of inflation also rose. The annual increase in the retail prices index - used as the benchmark for many wage claims - stood at 3.2% in October, up from 2.6% in September. The jump in inflation was far higher than the City had been expecting and will intensify the squeeze on household spending power at a time of modest pay increases. Amid fears that the UK could drift into a triple-dip recession over the winter, a Treasury spokesman admitted the October increase in inflation was "disappointing," but noted that the annual rate was well down on its recent 5.2% peak in September 2011. "The government has taken action to help people with the cost of living, including freezing fuel duty and council tax and taking 2 million people out of income tax altogether," the spokesman added. Analysts said the short-term outlook was for inflation to move further away from the government's 2% target as the UK feels the impact of higher energy and food bills. James Knightley, economist at ING, said: "We expect to see further increases in the annual rate of inflation given that agriculture prices have been rising sharply while utility providers have announced steep rises in gas and electricity prices, the majority of which will come into effect in early December. As a result, we could see inflation moving back up to 3.0% by January. Chris Williamson, economist at Markit, said: "Further price hikes in coming months suggest that the rising cost of living will continue to act as a drag on economic growth, causing the Bank of England to revise down its growth projections, which will in turn raise the perceived need for further stimulus."