According to the report from the Office for National Statistics, in November, the consumer price index rose by 5.1% per annum after increasing by 4.2% per annum in October. The latest increase was the sharpest in a decade, with the CPI value being more than twice the Bank of England's target of 2%. Economists had expected a 4.7% increase. According to the latest forecasts of the Bank of England, inflation will reach 5% in the spring of 2022, and then fall to the target of 2% at the end of 2023.
Meanwhile, on a monthly basis, consumer price growth slowed to 0.7% compared to +1.1% in October. Economists had expected a 0.4% increase.
The data also showed that the consumer price index, including owner occupiers' housing costs (CPIH), rose in November by 4.6% per annum after an increase of 3.8% per annum in October. The acceleration of growth was associated with an increase in transportation costs and housing and household services. On a monthly basis, CPIH increased by 0.6%, which was mainly due to an increase in transportation costs.
A sharp rise in consumer prices will increase pressure on Bank of England policymakers who will meet on Thursday to discuss whether to tighten monetary policy, but the rapid spread of the omicron coronavirus strain has caused new uncertainty about the economic recovery in the short term.