Input costs rose to a five-year high, with the rate of acceleration between September and October the highest in two decades.
Chris Williamson, chief economist at Markit, said: “An encouraging picture of the economy gaining further growth momentum in October is marred by news that inflationary pressures are rising rapidly.
“The ugly flip-side of the weaker pound is clearly evident, with the rate of increase of service providers’ costs showing the largest monthly acceleration seen in 20 years of survey data collection.
“If sustained, the increase in prices threatens to curb both corporate hiring and consumer spending, as firms seek to reduce staff costs and households see their pay eroded by rising inflation.”
Mr Williamson said the Bank of England was unlikely to unleash more monetary stimulus in the near future.
“Given the faster growth of both business activity and prices, it’s hard to see how the Bank of England would consider any further stimulus appropriate at this stage, though policymakers will most likely want to stand ready to act if the UK’s path to Brexit leads to any escalation of economic uncertainty.”