Inflation hits eight-month high of 2.6% in November

Inflation has risen for the second month in a row, rising to 2.6% in November, up from 2.3% the previous month, marking the highest level of inflation in eight months. According to the Office for National Statistics, the main drivers behind the rise were fuel and clothing, where prices rose this year but fell a year ago.

The increase means that the inflation figure is still above the Bank of England’s target of 2%, with the bank set to publish its next rates decision this week. Economists are expecting rates to be held at 4.75%. 

According to the ONS data, prices of clothing and footwear rose by 2% in November, up from 1% the previous month.

Meanwhile, the average price of petrol rose by 0.8p a litre between October and November 2024 to 134.8p a litre, while the price of diesel rose by 1.4p a litre to 140.5p. 

This rise was offset by air fares, where prices fell by 19.3% in November compared with a fall of 13.9% a year ago. Fares usually fall in November, according to the ONS, but the drop in 2024 was the largest November fall since monthly price collection began in 2001.

Elsewhere, the price of food rose slightly from 1.9% to 2%, while alcohol and tobacco jumped from 5.3% to 6.9% in November. 

Overall prices in the recreation and culture division also rose by 3.6% in the year to November, up from 3.1% in the year to October.

Commenting on today’s figures, 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.”

Isaac Stell, Investment Manager at Wealth Club, added: “The strength of the latest inflation figures, coupled with Tuesday’s higher than expected wage growth data may well put to bed the possibility of a pre-Christmas rate cut from the BoE on Thursday. Although the public may feel Andrew Bailey and co are channelling their inner Scrooge, prudence on the BoE’s part seems sensible as no one wants to see the inflationary ghosts of Christmas past return.

“This latest inflationary spike adds to the New Year challenges facing the BoE. With businesses shouldering the Chancellors national insurance rises, the indication of prices hikes from companies have been coming thick and fast. There may be cuts to jobs and less generous pay rises to boot. Those hoping to see a continuous stream of rate cuts in 2025 will likely be disappointed.”