UK inflation rises to 2.6% in November

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UK inflation accelerated to 2.6 per cent in November, in line with analysts’ predictions, cementing expectations that the Bank of England will hold rates steady at its meeting on Thursday.

The rise in the consumer price index was above the 2.3 per cent recorded in October.

The Office for National Statistics data comes as the BoE’s Monetary Policy Committee meets this week to set rates amid signs of a stagnating economy.

GDP has shrunk for two months in a row, while business surveys point to weaker confidence and curtailed hiring intentions. But a pick-up in UK wage growth has further diminished hopes of an interest rate cut this week.

The rate of services inflation, which is closely watched by the central bank as a gauge of underlying domestic price pressures, was 5 per cent in November, matching October’s figure but below analysts’ expectations of 5.1 per cent.

The central bank has cut its key rate to 4.75 per cent in two quarter-point moves this year. Governor Andrew Bailey has said the BoE will continue to ease policy gradually.

Following the release of the data, sterling edged down 0.1 per cent to $1.269. 

This is a developing story