U.K. inflation held at the highest rate since May last month as higher electricity and gas costs kept consumer-price growth above the Bank of England’s target.
Consumer prices rose 2.7% from a year earlier, unchanged from October, the Office for National Statistics said in London today. That matched the median forecast of 34 economists. Upward pressure on inflation came mostly from food and utilities.
Bank of England Chief Economist Spencer Dale raised concerns last week that inflation may show "stickiness," complicating the task of policy makers seeking to stimulate the economy with price growth above their 2% goal. The central bank raised its near-term inflation forecast last month and today’s data may fuel debate on whether the central bank’s mandate should be changed.
Clothing and shoes knocked 0.03 percentage points off the annual inflation rate in November, the statistics office said. Food prices added 0.06 percentage points, while utilities added 0.05 percentage points. A price increase by energy supplier SSE Plc (SSE) affected the November inflation rate, with increases by companies from RWE Npower Plc to Centrica Plc (CNA), the owner of British Gas, due to be included in the index from this month.
The goods inflation rate remained at 1.5% in November, while the services rate rose to 4.2% from 4.1%, the ONS said.
Core inflation, which excludes alcohol, food, tobacco and energy prices, remained at 2.6% in November.
Retail-price inflation, a measure used in wage negotiations, slowed to 3% in November from 3.2% in October. The retail-price index excluding mortgage-interest payments was at 2.9%
The Bank of England forecast last month that inflation will be at about 1.8 percent in the final quarter of 2014, and said risks to the forecast for it to reach the target in the medium term are "broadly balanced."
