Consumer prices in the U.K. rose in November at the fastest pace in almost six years, intensifying a squeeze on household budgets that shows little sign of letting up.
Annual inflation hit 3.1% last month, the Office for National Statistics said Tuesday, fueled by higher prices for products including computer games, as well as higher airfares than a year earlier.
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Consumer prices last rose at a faster annual rate in March 2012. Economists polled by The Wall Street Journal had expected the annual rate to stay steady at October's 3.0%.
The pickup in inflation adds to a squeeze on household budgets that is already weighing on consumer spending and the wider economy. The rise in prices has been largely driven by higher import prices caused by a steep fall in the pound following the decision by voters last year to pull the U.K. out of the European Union.
The Bank of England lifted its benchmark interest rate in November for the first time in a decade in an attempt to bring inflation back to its 2% annual target. Officials telegraphed that they expect to raise rates by a quarter of a percentage point two more times in the next three years.
The bout of high inflation in the U.K. comes as central banks such as the U.S. Federal Reserve and the European Central Bank are grappling with the opposite problem--inflation that is too low despite accelerating growth.
Figures on Tuesday suggest that the current spell of high inflation in the U.K. may persist for longer than economists had been expecting. Most had expected consumer price-growth to peak late this year before drifting back to the BOE's target through 2018.
Yet the ONS said the prices charged by companies at the factory gate were 3% higher than a year earlier, while a near-30% rise on the year in the price of crude oil pushed up companies' raw-material costs, suggesting inflationary pressures are set to linger
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(END) Dow Jones Newswires
December 12, 2017 04:57 ET (09:57 GMT)