The UK’s inflation rate hits a 10-year high before the important meeting of the Bank of England

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On June 18, 2020, shoppers wearing protective masks walked in the rain on Oxford Street, London, as some non-essential retailers closed and reopened due to the coronavirus.

Tolga Akmen/AFP/Getty Images

LONDON-As consumer prices continued to soar ahead of Thursday’s Bank of England tightening monetary policy meeting, the UK inflation rate climbed to a 10-year high in November.

The consumer price index rose 5.1% in the 12 months to November, up from 4.2% in October. This in itself is the largest increase in a decade and more than double the central bank’s target.

Economists surveyed by Reuters had previously expected inflation to be 4.7% in November. The Bank of England had predicted that inflation would reach 5% in the spring of 2022 and then slow to its target of 2% by the end of 2023.

On a monthly basis, UK inflation in November rose 0.7% from October, which was higher than the 0.4% surveyed by Reuters.

The core CPI, which excludes fluctuating energy, food, alcohol and tobacco prices, rose 4% year-on-year, compared with Reuters’s forecast of 3.7%, a 0.5% increase from the previous forecast of 0.3%.

The Bank of England’s Monetary Policy Committee met on Thursday to decide whether to tighten monetary policy. Inflation has soared and the labor market is still strong. However, the rapid spread of Covid-19 variants in Europe and the United States has brought new uncertainties to the short-term economic recovery.

The Monetary Policy Committee maintained interest rates at a historic low of 0.1% by 7 votes to 2 in November, ignoring market expectations. However, given the emergence of omicron, analysts are divided on whether it will trigger an interest rate hike on Thursday.

“Unfortunately for consumers, the inflation peak may still be several months away. Today’s CPI data will only increase the pressure on the Bank of England to raise interest rates at the MPC meeting tomorrow,” said Chad, head of fixed interest research at the Bank of England. Carter said. Quilted Cheviot.

“However, given the current uncertainties surrounding the economic impact of the Omicron variant, coupled with the risk that further restrictions may be required, the Bank of England is likely to decide that discretion is the better part of courage, instead choosing to wait until soon next year. introduced.”


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