UK inflation rate rises to 3.1%

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    MoneyImage copyright PA

    Inflation rose to 3.1% in November, the highest in nearly six years, as the squeeze on households continued.

    The Office for National Statistics (ONS) said that airfares and computer games contributed to the increase.

    Mark Carney, the governor of the Bank of England, will now have to write a letter to Chancellor Philip Hammond explaining how the Bank intends to bring inflation back to its 2% target.

    The most recent data shows that average weekly wages are growing at just 2.2%.

    In November, the Bank of England raised the interest rate for the first time in more than a decade from 0.25% to 0.5%.

    However, it is not expected to announce a further increase when it publishes the results of the Monetary Policy Committee’s two-day meeting on Thursday.

    Mr Carney had said that he expected inflation to peak in October or November.

    Lucy O’Carroll, chief economist at Aberdeen Standard Investments, said: “It’s quite possible that inflation is now close to its peak. But some of the latest surveys suggest that service sector costs and prices are rising. Given how dominant services are in the economy, this could feed through to inflation overall.

    View the original article: http://www.bbc.co.uk/news/business-42320052

    “That means that further interest rate rises are definitely not off the table.”

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