UK Inflation Rises to 2.6% - Highest Level in Eight Months

• Inflation increased to 2.6% in November, driven by higher fuel and clothing costs
• Food, non-alcoholic drinks, and household services saw rising prices
• Analysts expect the Bank of England to hold interest rates steady

The UK’s inflation rate has climbed for the second consecutive month, reaching its highest level since March 2024 at 2.6%, according to figures from the Office for National Statistics (ONS). Key contributors include rising fuel prices, clothing, and event ticket costs.

What’s Driving Inflation?

ONS chief economist Grant Fitzner explained that while rising fuel and clothing prices drove inflation up, the largest recorded drop in airfare prices for November partially offset the increase.

Chancellor Rachel Reeves acknowledged the ongoing struggles for families amid rising living costs, stating, “I am fighting to put more money in the pockets of working people.”

Shadow Chancellor Mel Stride criticised recent government decisions, claiming they risk keeping mortgage rates high for longer.

Impact on Households and Businesses

The rise in inflation is felt across various sectors:

• Food and drink prices increased, adding to household budgets.
• Housing and services costs, including rent, rose by 3.5%.
• Businesses like Miller’s Fish and Chips in Yorkshire report increased pressure from wage costs and utilities.

David Miller, owner of the fish and chip shop, described the challenges: “We’ve taken a hit with fuel and utilities going up, but wages are the biggest cost for businesses.”

Despite the rise, inflation remains well below the 11.1% peak in October 2022. Analysts expect the Bank of England to hold interest rates steady during its next meeting, reflecting caution in the face of fluctuating economic pressures.