London, United Kingdom, Dec 15 – British inflation rocketed to its highest level for more than 10 years on broad price gains, data showed on Wednesday on the eve of a Bank of England interest rate decision.
The annual rate surged to 5.1 percent in November after October’s 4.2 percent, the Office for National Statistics said in a statement.
November marked the highest level since September 2011, with inflationary pressures driven partly by jumping fuel costs.
The BoE, whose main task is to keep inflation close to a 2.0-percent target, will on Thursday announce its latest monetary policy decision amid turmoil over the Omicron coronavirus variant.
“A wide range of price rises contributed to another steep rise in inflation, which now stands at its highest rate for over a decade,” said ONS Chief Economist Grant Fitzner.
“The price of fuel increased notably, pushing average petrol prices higher than we have seen before.
“Clothing costs — which increased after falling this time last year — along with price rises for food, second-hand cars and increased tobacco duty all helped drive up inflation this month.”
Inflationary pressures were also fuelled by the global supply crunch and jumping commodity prices.
“The cost of goods produced by factories and the price of raw materials have continued to increase significantly to their highest rate for at least 12 years,” Fitzner said.
After countries emerged from pandemic lockdowns this year, companies struggled to meet demand for goods and services, sending inflation soaring.
Runaway energy costs, fuelled by reopening economies, have also propelled global inflation.
Central banks use interest rate hikes to try to damp high inflation, which is weighing on companies and consumers globally.
However, the BoE will probably hold its key interest rate at the current record low of 0.1 percent due to the possible economic impact of Omicron, analysts say.
“This (inflation data) gives the bank enough ammunition to raise interest rates tomorrow, but we still think it is more likely to keep its powder dry until it knows more about the Omicron situation.”
Omicron, which emerged late last month, has forced the UK government to re-impose coronavirus restrictions and sparked fresh economic turmoil which most analysts believe will persuade the BoE to hold its fire.
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