UK inflation ticked higher in November, with the Office for National Statistics reporting a rise in annual consumer prices to 2.6%, up from 2.3% in October. This is the highest rate since March and comes against a backdrop of climbing fuel and clothing prices.
Core inflation, which leaves out everyday essentials like energy and food, came in just under expectations at 3.5%. It still ticked up from October’s figure, reinforcing that underlying price pressures remain. Many observers expect the upward pull to persist as we head deeper into winter.
So, can we expect a rate cut at the next BoE meeting? Probably not. The persistence in services inflation, stuck at 5%, could keep policymakers cautious. Wages have been increasing, but the cost of living is outpacing some previous forecasts. That leaves families, homeowners, and businesses with a fresh set of worries as winter takes hold.
Still, these figures remain well below the dramatic spikes seen in 2022. Back then, double-digit readings caused widespread alarm. Now inflation hovers at a more moderate level, but that may be cold comfort to those facing steeper bills. Government decisions, extra spending, higher business taxes, could nudge prices up a bit more over time, some analysts believe. Will the cost of everyday life drift higher or level off?
All in all, the figures were largely in line with expectations. However, the unexpected 0.1% drop in GDP in October -- marking the second consecutive month of contraction and missing the BoE's own projections -- is currently the main worry for economists.