Business
Inflation climbs to 6.2% as core prices rise, signalling renewed pressure on economy | The Express Tribune
Non-food, non-energy inflation accelerates; border closure sends tomato prices up 127% and sugar 35%, while gas jumps
ISLAMABAD:
Inflation rose for the second consecutive month to 6.2% last month due to movement in prices across various groups, with a notable increase in non-food and non-energy goods’ rates, indicating a buildup of underlying inflationary pressure.
The Pakistan Bureau of Statistics (PBS) reported on Monday that the key inflation benchmark increased by 6.2% on a year-on-year basis in October. The surge was in line with the government and market expectations. The government has attributed the increase to supply shocks caused by floods and the Pak-Afghan border closure. It was the second consecutive month when the price level increased in the country compared to a year ago. In urban areas, inflation increased by 6% on a year-on-year basis, while there was a surge of 6.6% in rural areas and towns. Inflation is again becoming a headline concern after prices started increasing for the past couple of months.
However, core inflation, which is calculated after excluding food and energy items to observe underlying pressures, also jumped. The core indicator suggests whether the rise is temporary or reflects longer trends.
The PBS reported that, measured by non-food and non-energy items, core inflation increased by 7.5% in urban areas compared to 7% of the previous month. Likewise, core inflation in rural areas also increased to 8.4% compared to 7.8% in the previous month. This suggests that the current trend may continue for a few months. Last month, the World Bank upwardly adjusted its inflation forecast for Pakistan to 7.2% for this fiscal year, which is slightly above the target.
The central bank had earlier said that inflation would temporarily increase this year because of floods and would start slowing during the later part of the second half of the fiscal year. The central bank had kept the interest rate unchanged at 11%, which is far higher than the headline inflation rate.
While addressing a press conference, Finance Minister Muhammad Aurangzeb said that interest rates were falling in the right direction but again hoped for a further cut in the rate.
Last month, the business community complained to the prime minister about high interest rates despite there being significant scope for reduction.
The government has kept Rs8.2 trillion for interest expense in the budget, but Secretary Finance, Imdad Ullah Bosal, said that actual spending would remain below the allocation due to better debt management.
The central bank is maintaining interest rates far above prevailing inflation levels, even as it projects that the economic growth target of 4.2% will again be missed this fiscal year.
The data showed that food price inflation accelerated to 4.5% in cities and 6.8% in rural areas, due to an increase in perishable and non-perishable food items.
According to the details, among non-perishable foods, which make up nearly 30% of the inflation basket, prices rose by 6.2% on average last month compared to a year earlier. In contrast, perishable goods recorded a 1.7% increase.
Due to border closures with Afghanistan, tomato prices increased 127%, followed by a 35% increase in sugar prices. The government has failed to deliver on its promise of ensuring the provision of sugar at less than Rs165 per kilogram. Wheat rates also surged by one-fourth, followed by a 16% increase in the rates of wheat flour. However, onion rates decreased by one-third, followed by a 29% reduction in chicken prices. There was also an administrative increase of 23% in the rates of gas last month compared to a year ago. But electricity charges were 16% lower than a year ago.
The Minister for Power, Sardar Awais Leghari, said on Monday that electricity prices were Rs10.3 per unit lower than a year ago due to renegotiations of energy agreements and reducing losses and inefficiencies.
Business
Alan Bates to get multi-million-pound payout over Post Office saga
Post Office campaigner Alan Bates has agreed a multi-million pound compensation figure from the Post Office, sources close to the deal have confirmed to the BBC.
The payout for Sir Alan comes more than 20 years after he started campaigning for justice for victims of the Horizon scandal which led a group of 555 sub-postmasters launching landmark legal action against the Post Office.
The exact sum paid to Sir Alan has not been made public and he has not responded to requests for comment.
Between 1999 and 2015, more than 900 sub-postmasters were wrongly prosecuted after the faulty Horizon IT system indicated shortfalls in Post Office branch accounts.
Hundreds more poured their own savings into their branch to make up apparent shortfalls in order to avoid prosecution.
Marriages broke down, and some families believe the stress led to serious health conditions, addiction and even premature death.
A spokesperson for the Department for Business and Trade said: “We pay tribute to Sir Alan Bates for his long record of campaigning on behalf of victims.
“We can confirm that Sir Alan’s claim has reached the end of the scheme process and been settled.”
As of September 2025, a total of £1.23bn had been awarded to more than 9,100 sub-postmasters.
Sir Alan first received an offer of redress in January 2024, which he rejected, describing it as “cruel and derisory”.
He was made another offer in May 2024 which he said was around a third of what he had requested. In May of this year, he said that he’d received a third offer for less than 50% of his original claim.
Sir Alan was part of the Group Litigation Order compensation scheme, under which claimants can either receive £75,000 or seek their own settlement.
As part of plan to claim his own settlement, Mr Bates told the BBC his lawyers had included compensation owed for his 20 years of campaigning for justice for those sub-postmasters caught up in the scandal.
The Post Office/Horizon scandal reached new heights in the public consciousness last year after Sir Alan’s campaign for justice was portrayed in the ITV drama series Mr Bates vs the Post Office.
The government adopted all but one of the recommendations of a report published following an inquiry into the scandal.
The inquiry detailed the full human impact of the scandal for the first time: the report said that more than 13 people may have taken their own lives as a result of what happened to them.
Earlier this year, Sir Alan accused the government of putting forward a “take it or leave it” offer of compensation amounting to less than half of his claim.
Many victims have previously complained about being forced to accept low offers of compensation, without the benefit of legal help.
Last month, the government announced that all victims who are claiming compensation will now be entitled to free legal advice to help them with their offers.
There are four different compensation schemes, which are aimed at different groups of victims.
Individual eligibility for compensation depends on the particular circumstances of each case.
However, the schemes have been criticised for being too slow and complicated, with many of the worst-affected victims receiving far less than their original claims.
Business
Calls for ‘outright ban on absurd’ mid-contract telecoms price rises
Ofcom is facing calls for an “outright ban” on “absurd” mid-contract price hikes after the Government separately asked the regulator to revisit its rules on the practice.
The calls follow O2 unexpectedly announcing it was raising prices by £2.50 a month for existing customers.
On Monday, Technology Secretary Liz Kendall wrote an open letter to Ofcom bosses asking them to review mid-contract price rises again.
She wrote: “As we discussed when we met earlier this month, driving down inflationary costs and protecting consumers are vitally important for this government.
“As such, I welcome both the action you took in January to increase transparency on how in-contract prices are presented in new contracts, and your statement yesterday expressing disappointment with O2’s price rises.
“I strongly agree they are against the spirit of your previous changes on pricing, and all the more disappointing given the current pressures on consumers.”
She added: “Nevertheless, I believe we need to go further, faster. I am keen that we look at in-contract price rises again.”
Ofcom has been given until November 7 to respond to Ms Kendall’s letter.
Ofcom said: “We share the Government’s concern that customers who face price rises must be treated fairly by mobile providers and they are empowered to exercise their right to switch penalty-free if they didn’t agree to them upfront.
“We will respond to the Secretary of State’s specific queries shortly.”
O2 said in a statement: “We appreciate that price changes are never welcome, but we have been fully transparent with our customers about this change, writing directly to them and providing the right to exit without penalty if they wish.”
Ofcom introduced new rules in January to crack down on phone and broadband providers increasing prices in the middle of a contract without warning.
But last week, O2 announced it would be raising its monthly prices by more than originally promised.
It was able to do this because the increase was not linked to inflation, and it has given customers 30 days to leave without penalty providing they continue to pay off the cost of their device.
O2 said it has not gone against the regulation and Ofcom’s rules do not stop providers from raising prices.
The firm said: “A price increase equivalent to 8p per day is greatly outweighed by the £700 million we invest each year into our mobile network, with UK consumers benefitting from an extremely competitive market and some of the lowest prices compared to international peers.”
Alex Tofts, broadband spokesman from comparison site Broadband Genie, said: “What we’re seeing from O2 and price rises from other major providers is a direct result of crude regulation that has been poorly thought out, with its implications not given enough consideration.
“The only real way to protect customers is to outright ban these absurd mid-contract price hikes. Some providers already offer fixed prices, so why can’t those with the biggest profit margins do the same?
“We fully back the call for Ofcom to revisit these regulations. Until then, we urge all consumers to check whether they’re still in contract.
“To be fair to Ofcom, the broadband switching process has become much easier thanks to the One Touch Switch system. One-in-three households are currently free to switch, and with many providers offering competitive new-customer discounts, now could be the best opportunity to protect your budget before further price rises take effect.”
Business
Primark owner profit dips as UK sales fall amid inflation squeeze
Primark saw sales drop in the UK as people spent less at the budget retailer, its owner Associated British Foods (ABF) said.
In the year to September it saw a 3.1% fall in like-for-like sales compared with the year prior, which it said reflected weak consumer confidence.
The company said it expected the “subdued” retail market to impact Primark sales into 2026.
ABF said that it was exploring splitting off the fast-fashion retailer from its food business, where it owns brands like Twinings, Ovaltine and Ryvita.
The entire business saw profits fall by 13% to £1.4bn for the year.
Chief executive George Weston said though he was “confident” for 2026, it depended on the “consumer environment” which was was “particularly unpredictable at the moment”.
British shoppers have been tightening their belts amid rising prices on the UK high street, and turning to even cheaper competitors such as Shein and Temu.
Inflation, the rate at which prices rise, has held stubbornly at 3.8% for the year to September. Although inflation is down from highs seen in 2022-2023, it remains above the Bank of England’s target of 2%.
The Associated British Foods boss said in a call after the financial results that there was a “working assumption” in ABF that a separation of Primark “is where we would like to get to”, although no decision had been made.
Dan Coatsworth from AJ Bell said it was not clear what triggered a rethink by the board, which had previously pushed back against the idea of a break-up, but did say Primark could command a much higher share price as a standalone company separate from its food business, which AB Foods said was “less well-understood” by the market.
Mr Coatsworth said over the years many people have expressed a desire to only invest in Primark, rather than have its rapid growth “diluted” by non-retail interests.
He added that “the wheels are being greased for a corporate break-up”, especially as such demergers are “all the rage” at present, with Unilever, Kraft Heinz and Warner Bros Discovery among those currently in the process.
“The idea of ‘slimming to greatness’ is based on the principle that big companies might benefit from having a tighter focus rather than spinning three or four plates at the same time,” he added.
Laura Lambie from Rathbones added that ABF was a “disparate mixture of businesses with no real strategic rationale behind it”.
Primark, which has 475 stores in 18 countries, had reached the size where it requires extra focus to capitalise on its growth prospects, particularly overseas said analysts, with one saying Primark was the “jewel” in ABF’s crown.
But Primark’s challenges in the UK could worsen as Chancellor Rachel Reeves is widely expected to raise taxes in the Budget later this month.
That would come on top of cost rises seen since the last Budget, including more expensive staffing costs as a result of the rise in minimum wage.
People are feeling insecure about their jobs as businesses cut back on hiring, said Laura Lambie from Federated Hermes, and that was part of what was fuelling a “difficult environment” for retailers as profit margins shrunk.
The news comes as a series of casualties on the UK high street continue as the costs of maintaining bricks-and-mortar stores becomes too high amidst rising online competition and pressure on consumer spending.
Recent retail names that have had to close stores or enter administration include Bodycare, Claire’s, and Pizza Hut which said it will be slashing the number of restaurants it operates.
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