Royal Exchange columns are dressed for Christmas, at Bank in the City of London, the capital's financial district, on November 20, 2024 in London, England.
Richard Bakker | In images | Getty Images
LONDON – British inflation rose to 2.6% in November, the Office for National Statistics said on Wednesday, marking the second consecutive monthly rise in the overall rate.
The outcome matched the forecast of economists polled by Reuters, rising from 2.3% in October.
Core inflation, which excludes energy, food, alcohol and tobacco, came in at 3.5%, just below the Reuters forecast of 3.6%.
Overall price increases reached a three-and-a-half-year low of 1.7% in September, but were expected to be higher in subsequent months, partly due to an increase in the energy price cap set by regulators this winter.
“This upward trajectory looks set to continue in the coming months,” Joe Nellis, an economic adviser at accounting firm MHA, said in an emailed comment Wednesday, citing the energy market and “long-term pressure from a tight domestic labor market.”
Persistent inflation in the services sector, the dominant part of the British economy, has led money markets to price in virtually no chance of a rate cut at the Bank of England's latest meeting on Thursday. These expectations were confirmed earlier this week when the ONS reported that regular wage growth increased to 5.2% in the August-October period, up from 4.9% in July-September.
November figures showed services inflation unchanged at 5%.
If the BOE leaves monetary policy unchanged in December, it will end the year with only two cuts in its policy rate, bringing it from 5.25% to 4.75%. The European Central Bank has now cut four quarters of a percentage point and this month expressed its firm intention to go even further next year.
The US Federal Reserve is widely expected to cut interest rates by a quarter of a percentage point at its own meeting on Wednesday, bringing the year's total cuts to a full percentage point. There is some skepticism about whether the country should take this step given inflationary pressures.
This is a current news item and will be updated soon.