UK inflation spiked to 2.6 per cent ahead of the Bank of England’s meeting to decide interest rates later this week.
Data from the Office for National Statistics revealed that year-on-year inflation matched expectations of 2.6 per cent in November, up from 2.3 per cent in October.
Meanwhile, core inflation, which excludes volatile commodities like food and energy, rose to 3.5 per cent from 3.3 per cent in October. However, this was slightly below the expectations of 3.6 per cent.
Falling inflation earlier this year gave members of the BoE’s Monetary Policy Committee (MPC) confidence in lowering interest rates in August and November.
The headline rate fell to 1.7 percent in September but has since been driven higher by rising energy costs. Services inflation, which the Bank of England is closely monitoring for signs of domestic price pressures, has also remained elevated.
However, today’s figures showed that service inflation remained steady from last month at five percent, versus the 5.1 percent figure expected by the market.
Despite the numbers, the Bank of England is still expected to keep interest rates on hold at its meeting later this week, and markets are still split over whether it will cut rates in February.