Another month, another dismal UK inflation report.
From the Office for National Statistics:
For the Bank of England, about the only crumb of comfort is that November’s inflation rise was primarily due to higher food prices. Core inflation was stable at 2.7 per cent.
Still, there’s no reason to expect inflation to fall back any time soon.
Says Howard Archer of IHS Global Insight:
Consumer price inflation looks ever more likely to reach 3.5% in the early months of 2011 and it may very well rise further still due to elevated food, commodity and energy prices as well as January’s VAT hike.
And while today’s reading won’t surprise the BoE — it expects inflation to average 3.2 to 3.3 per cent in the fourth quarter and circa 3.5 per cent early in 2011 — there’s bound to be (further scepticism) that the inflation genie will be back in the bottle by the end of 2011.
Related link:
BoE: we don’t really know about inflation – FT Alphaville