The rate of inflation rose for the second month in a row in November further dashing hopes of an early interest rate cut.
The consumer prices index (CPI) went up from 2.3% to 2.6%, in line with City forecasts but ahead of the Bank of England’s 2% target.
There will be concern that the closely watched core inflation measure - which strips out more volatile goods and services such as food and energy, went up from 3.3% to 3.5%. Services inflation was unchanged at 5%.
The Bank’s rate setting Monetary Policy Committee will announce its latest decision at noon tomorrow but the City believes a hold at 4.75% is almost certain.
ONS Chief Economist Grant Fitzner said: “Inflation rose again this month as prices of motor fuel and clothing increased this year but fell a year ago.
“This was partially offset by air fares, which traditionally dip at this time of year, but saw their largest drop in November since records began at the start of the century.”
Chancellor Rachel Reeves said: "I know families are still struggling with the cost of living and today’s figures are a reminder that for too long the economy has not worked for working people.
“I am fighting to put more money in the pockets of working people. That’s why at the Budget we protected their payslips with no rise in their national insurance, income tax or VAT, boosted the national living wage by £1,400 and froze fuel duty.”
Jeremy Batstone-Carr, European Strategist, at Raymond James Investment Services said: “Today’s data shows that inflation edged further away from the Bank of England’s 2% target last month, checking in at 2.6% for November. Having fallen to just 1.7% back in September, the strengthening inflationary pressures will dismay rate-setters ahead of their meeting tomorrow.
