UK inflation, November 2024
The pillars of the Royal Exchange are dressed for Christmas at the bank in the City of London, the capital’s financial district, in London, England, on November 20, 2024.
Richard Baker | In pictures | Getty Images
LONDON – Inflation in the United Kingdom rose to 2.6% in November, the Office for National Statistics said on Wednesday, marking the second consecutive monthly increase in the overall figure.
The reading was in line with forecasts by economists polled by Reuters, rising from 2.3% in October.
Core inflation, excluding energy, food, alcohol and tobacco, was 3.5%, just below the Reuters forecast of 3.6%.
Overall price increases reached 1.7% in September, their lowest level in three and a half years, but were expected to rise further in the following months, partly due to an increase in the energy price cap set by the regulator this winter.
“This upward trend is expected to continue over the next few months,” Joe Nellis, economic adviser at accounting firm MHA, said in an email Wednesday, citing the energy market and “the long-term pressures of 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 almost no chance of a rate cut during the Bank of England’s final meeting of the year on Thursday. These bets were confirmed earlier this week when the ONS reported them regular wage growth strengthened to 5.2% in the August-October period, compared to 4.9% in the July-September period.
November data showed service sector inflation remained unchanged at 5%.
If the BOE leaves its monetary policy unchanged in December, it will end the year with just two cuts to its key interest rate, from 5.25% to 4.75%. The European Central Bank has now decided four cuts of a quarter of a percentage point each and this month signaled a firm intention to go lower next year.
The US Federal Reserve is Interest rates are widely expected to be cut by a quarter point at its own meeting on Wednesday, bringing the year’s total cuts to a full percentage point. Some skepticism Given inflationary pressures, the EU is still considering whether to take this step.
This is a breaking news story and will be updated shortly.
