Petrol And Rents Drive Disappointing Inflation Rise

20th December 2024

CPI inflation increased to 2.6 per cent in November - higher than the Bank of England had expected – highlighting the challenge Britain faces in getting inflation back down to its target.

The rise was driven by petrol prices, which fell by less over the past year in November than they did in October and have increased over the past month, and rising rents.

Disappointingly, core inflation increased on the month (from 3.3 to 3.5 per cent) and there was no progress on the closely watched services inflation rate which remained at 5.0 per cent.

James Smith, Research Director at the Resolution Foundation, said:

"Britain's run of disappointing economic data has continued with a second month in a row of chunky inflation rises.

“With headline and core inflation rising over the past month, while domestically driven services inflation is proving stickier than expected, this latest data shows the challenge Britain faces in squeezing inflation out of the economy.

“With pay rises also outstripping continuing productivity increases, the outlook for pay, prices and interest rates in 2025 remains a difficult one."