UK 12-month inflation rose to 2.7% in November, the highest level since Labour came to power in 1997, official data shows today. It had stood at 2.4% in October, while analysts' consensus forecast had been for a rise of 2.6% in November.
The November increase means that the inflation rate was above the British government's 2% target for a seventh month in a row. Analysts said the data increased the likelihood of a rise in UK interest rates next year, which in turn gave a boost to sterling on foreign exchange markets today.
The Office for National Statistics said the biggest upward effect on prices came from transport costs, where fuel prices fell this year by less than a year ago. Significant upward effects also came from air travel and utility bills, as well as from recreation and culture, particularly prices of digital cameras and package holidays.
'New figures from the Office for National Statistics show that Consumer Prices Index annual inflation - the government's target measure - was 2.7% in November, the highest on record,' the ONS said in a statement. On a month-on-month basis, the CPI rose by 0.3% in November.
The Bank of England last week kept its key interest rate at a five-year high point of 5%, opting against a third rise during 2006. The decision, which was widely expected by economists, came after the Bank had increased borrowing costs from 4.75% in November to help combat rising British inflation.
