Inflation has hit its highest point in over a decade.
It jumped to 5.1%, which is over double the Bank of England’s hope to keep it at around 2%. In October, inflation was 4.2%. Inflation has risen due to rising fuel costs, which have affected travel prices.
“The price of fuel increased notably, pushing average petrol prices higher than we have seen before. Clothing costs – which increased after falling this time last year – along with price rises for food, second-hand cars and increased tobacco duty all helped drive up inflation this month,” said Grant Fitzner, chief economist at the Office for National Statistics.
Commenting on the latest figures, Danni Hewson, AJ Bell financial analyst, said: “Another month, another hike in the cost of living. At 5.1% it’s uncomfortably above most analyst’s expectations and reaches the level the Bank of England had predicted for next spring. It begs the question; how hot will the temperature really get and how will households cope?”
“Should the Bank of England raise rates tomorrow? Should they have done it twelve months ago because realistically that’s how long the measure takes to make an impact. Think back to December 2020 and imagine the reaction if the Bank had hiked rates then. Now consider where we are.”
“There’s no question that prices are too high. There’s no question that if employers start to raise wages substantially that’s just going to add to the problem. There’s no question December 2021 is beginning to look a lot like December 2020 and there’s no question that whatever decision the bank makes tomorrow it won’t bring a solution for today.”