Households will be £20 a week worse of as a result of a surge in the cost of living.
Today’s ONS report showed expenses such as fuel, second-hand cars and gas bills pushed inflation to 4.2% last month.
That means on average, the cost of living is now that much more expensive than it was last year.
And perhaps worse is the fact that the Bank of England, which aims to keep inflation at 2%, has warned it will likely be 5% by April.
It comes as NHS workers face a 3% rise and pensioners a 3.1% - meaning many people will be worse off next year because prices are rising faster than wages.
The latest figures show inflation surged to nearly its highest since December 2011, pushed up by rising energy and petrol prices.
Shadow Chancellor Rachel Reeve said it will leave households more than £1,000 worse off - or £20 a week over a year.
How will a 4.1% rise in the cost of living affect you? Get in touch: mirror.money.saving@mirror.co.uk
She said: “Inflation rising to more than double the target and the highest since 2011 are extremely concerning giving the growing cost of living crisis."
Grant Fitzner, chief economist at the ONS, said: "This [rate rise] was driven by increased household energy bills due to the price cap hike, a rise in the cost of second-hand cars and fuel as well as higher prices in restaurants and hotels.
"Costs of goods produced by factories and the price of raw materials have also risen substantially and are now at their highest rates for at least 10 years."
A higher rate of inflation effectively means it costs 4.1% more money to afford basic items today – and your money won't stretch as far.
If inflation is higher than the interest you're earning on your savings - which it is - you are effectively losing money, too.
A saver with £1,000 stashed away in an easy-access cash account that pays an interest rate of 0.6% for instance, would make just £6.
But inflation means that £1,000 today would be worth 3% less in a year's time - effectively wiping £30 off your spending power.
Steven Cameron, pensions director at Aegon said: “With rising prices, consumers should consciously think about what products and services they are buying as the value of the money in their pocket becomes increasingly threatened.
"Borrowers, and particularly those who may have emerged from the pandemic in debt, will feel the squeeze on their finances even more so, during what is already a challenging time of year for many households."
What is inflation?
Inflation is the rate at which everyday goods and services are rising - if the cost of a £50 tank of fuel rises by £5, then fuel inflation is at 5%.
It applies to services too, like having your nails done or getting your car cleaned.
What’s risen in price?
The main rises have been on fuel and energy prices but the cost of second-hand cars and eating out also rose, the Office for National Statistics said.
Gas bills rose by 28.1% in the year to October, while electricity climbed by 18.8%.
Petrol prices also rose by 25.4p to 138.6p per litre amid a surge in global oil prices. That's the highest price since September 2012.
Used car prices also rose by 27.4% since April this year, due to a global microchip shortage which has slowed the production of new vehicles.
How does it affect me?
In the long term, it means you’ll get less for your pound and your money won’t stretch as far.
Instead, you have to be smarter with your cash.
Why are prices rising?
Covid has played a part – with demand soaring as economies have reopened around the world.
Demand for oil and gas is a main driver of rising energy prices. Firms are paying more to access it and therefore many are pushing their prices up for households.
Shortages of many goods, including building materials and computer chips, are causing supply problems and pushing up prices.
Businesses are also struggling to recruit lorry drivers and hospitality staff, and so are having to put up wages – this is a combination of the pandemic and Covid – and as a result, firms are pushing their prices up to claw back the cash.
