The IMF predicted this week that British inflation would reach around 5.5% in the second quarter of next year
British consumer price inflation soared to an annual rate of 5.1% in November, its highest since September 2011, up from 4.2% in October, official figures showed today, in news likely to unsettle the Bank of England (BoE).
The reading exceeded all forecasts in a Reuters poll of economists, which had on average forecast that inflation would rise to 4.7%.
The International Monetary Fund (IMF) predicted this week that British inflation would reach around 5.5% in the second quarter of next year – its highest in 30 years.
IMF warned the Bank of England not to succumb to ‘inaction bias’.
The BoE has said interest rates will almost certainly need to rise to bring down inflation.
But it held off on a widely expected move last month due to uncertainty about the impact of the end of the government’s job furlough programme.
Most economists do not expect the Bank of England to raise interest rates tomorrow after its December meeting, because of the unknown scale of the threat posed by rapidly rising cases of the Omicron coronavirus variant.
Globally, inflation has risen much faster than economists expected this year, due to higher energy prices and Covid-related supply-chain bottlenecks.
In Britain, post-Brexit trade and migration barriers have also caused problems.
Today’s data showed core CPI, which excludes more volatile energy, food, alcohol and tobacco prices, rose to 4% from October’s 3.4%, the Office for National Statistics (ONS) said.
This was above all economists’ forecasts and the highest since 1992.
The long-running retail price inflation (RPI) measure – which the ONS says is no longer accurate, but which is still used for inflation-linked government bonds and wage-bargaining – rose to 7.1% from 6%, its highest since March 1991.