The FTSE 100 is down 0.22 per cent or 16.12 points to 7,310.85, and the FTSE 250 index is down 0.4 per cent or 94.81 points to 23,444.90.

Sterling is at $1.34 against the US dollar.

Colin Dyer, Client Director at abrdn, said: 'Rising fuel and energy prices, paired with global supply chain disruptions, caused inflation to soar last month after a temporary respite in September.

'The cost of living has been increasing rapidly for much of 2021 because of the strong economic recovery from the coronavirus pandemic, but October’s inflationary rate is the highest we’ve seen in over a decade.

'And with the Bank of England now warning of it exceeding 5% early next year, it’s likely to remain an uncertain and uncomfortable period for many.

'For those trying to save, rumours of a rate rise on the horizon might seem positive, but this is unlikely to be substantial enough to show any real returns.

'As such, savers should ensure they are doing all they can to keep up with inflation rates and secure longer term positive growth.'

Martin Beck, senior economic advisor to the EY Item Club, said: 'The EY ITEM Club expects inflation to drift up further over the remainder of this year, as the impact of higher oil prices and supply chain challenges continue to feed through.

'The CPI measure is then likely to briefly peak next spring, when the impact of the next rise in the energy price cap and the VAT rate for the hospitality sector being restored to 20 per cent go on to affect the index.

'But each of these factors are temporary in nature and there remains little evidence of any escalation in underlying inflationary pressures.

'With oil and natural gas prices unlikely to continue rising at recent heated rates, and large negative base effects coming into play, the EY ITEM Club expects CPI inflation to fall below the 2 per cent target by mid-2023.'

Derrick Dunne, chief executive of YOU Asset Management, said: 'Today’s figures will no doubt spur speculation as to whether the MPC will finally move to hike interest rates at its December meeting, however this is looking less likely in light of the slowing GDP growth reported by the ONS last week.

'Just a few days ago in fact, The Bank’s own Chief Economist publicly acknowledged that acting too soon could derail some of the recovery which in some respects is still quite fragile.

'While The Bank maintains that this period of high-inflation will pass, investors would do well to review their plans and consider their options to counter the corrosive effect of inflation, for example investing in equities or investments which track the inflation rate.'

Ministers have ordered a full-blown investigation into Nvidia’s £31billion swoop on chipmaker Arm in a move that could scupper the takeover.

The controversial deal will face more delays after Culture Secretary Nadine Dorries intervened on competition and national security grounds.

The US tech giant agreed to buy Cambridge-based Arm from Softbank last September.

Big banks are cashing in on savers who hold billions of pounds in accounts that pay a pittance.

Santander has increased its net interest margin — the difference between what it pays savers and charges borrowers — by a fifth over the past year, from 1.59 per cent to 1.91 per cent. This is after the bank slashed the rate on its popular 123 account from 1.5 per cent at the start of 2020 to just 0.3 per cent now.

Michael Hewson, chief market analyst at CMC Markets UK, said: 'The pound received another modest lift this morning after UK CPI jumped by 1.1 per cent in October to 4.2 per cent and its highest level in almost 10 years.

'Retail prices also rose sharply, rising to 6 per cent, and above their 2008 peaks to their highest levels in over 30 years, while PPI input prices rose to 13 per cent, the highest levels in 13 years, which suggests that more price rises are coming down the line as we head towards year end.

'Today’s data is a huge embarrassment for the Bank of England whose procrastination over a modest 0.15 per cent rate rise earlier this month, now makes it odds on that all the pre-Christmas headlines will be of the Bank of England steals Christmas variety, if they do bite the bullet and belatedly nudge rates higher.'

Richard Carter, head of fixed interest research at Quilter Cheviot, said: 'This morning’s print suggests we should be braced for a showdown at the next MPC meeting in December, where all bets will be on a rate hike.

'Particularly given we now have more information on the state of the labour market in the UK, which seems to be transitioning from the end of the furlough scheme well.

'Yesterday’s employment numbers showed a 0.5% reduction in the unemployment rate between the second and third quarter of the year, despite the unwinding of the furlough scheme.

'Some may say that the heightened inflation is evidence that the Bank of England should have acted already and started the process of tightening monetary policy.

'But really what’s causing the heightened price increases in the energy market is a perfect storm of factors that are all feeding through at the same time.

'It’s not clear how a modest 0.15bps rate hike would have any impact on the heightened prices in the electricity and gas market. Normal monetary levers might not be effective.'

Three of Britain’s biggest companies saw their shares soar after a flurry of updates showed UK plc is thriving in the wake of the pandemic.

Steven Cameron, pensions director at Aegon, said: 'Following a dip in September, driven in part by the recovery of restaurant prices following the "eat out to help out scheme", CPI continued its upward path soaring to 4.2 per cent in the 12 months to October, driven by rising energy prices and supply chain issues.

'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.

'Any festive cheer of a boost to purchasing power looks unlikely in the lead up to the period where incomes are at their most stretched.

'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.

'Those on fixed incomes, such as many pensioners relying on the state pension, will also face a real challenge in meeting higher costs in the coming months, particularly with the government scrapping the state pension triple lock next year.

'This will mean the state pension’s 3.1 per cent increase in April will likely be far less than the rise in the cost of living at that time.'

JP Morgan is suing Tesla for £120million over claims it ‘flagrantly’ breached a contract.

The investment bought warrants – which are contracts to buy shares at a specific price – from the electric car maker in 2014, but changed the prices twice in the wake of controversial tweets from Tesla’s boss Elon Musk in 2018 suggesting he was taking Tesla private.

Richard Branson has sold another £224m of Virgin Galactic shares to prop up a business empire hammered in the coronavirus pandemic.

The billionaire got rid of 15.6m shares – 6 per cent of the space travel company – leaving him with 11.9 per cent.

UK inflation has jumped to a near-decade high as soaring energy and fuel prices pushed up the cost of living, according to official figures.

The Office for National Statistics said the rate of Consumer Prices Index inflation rose sharply from 3.1 per cent in September to 4.2 per cent last month – the highest level since December 2011.

It comes after gas and electricity prices have surged, with regulator Ofgem last month increasing the energy price cap by 12 per cent.

Prices on forecourts have also raced higher, with the fuel shortage in late September and early October sending petrol and diesel spiking higher amid wider ongoing rises in the global cost of oil.

The ONS said average petrol prices hit their highest since September 2012, at 138.6p per litre in October compared with 113.2p per litre a year earlier.

Grant Fitzner, chief economist at the ONS, said: 'Inflation rose steeply in October to its highest rate in nearly a decade.

'This 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.'

The Bank of England warned earlier this month that inflation will rocket to its highest level for 10 years.

It is forecasting CPI will reach 4.5 per cent in November and hit around 5 per cent next April, the highest level since 2011.