Fuel prices and clothing drive inflation rate higher
Inflation rebounded to a two-year high last month, driven by a hike in the price of clothes and fuel.
The Office for National Statistics (ONS) said the consumer prices index (CPI) measure of inflation hit a higher-than-expected 1.2 per cent in November, after easing back to 0.9 per cent the previous month from 1 per cent in September. Economists had pencilled in a figure of 1.1 per cent.
The ONS said a stronger performance from the pound last month took the edge off import prices for manufacturers despite total input costs climbing 12.9 per cent in the year to November, compared to a 12.4 per cent rise in October.
Sterling’s plunge to 31-year lows since Britain voted to leave the European Union is expected to push up the cost of living as manufacturers pass on higher costs to consumers.
Mike Prestwood, ONS head of inflation, said: “November’s slight rally in the value of sterling eased the inflationary pressure on businesses importing raw materials but consumer prices continued to edge upwards, due mainly to the rising cost of clothing and fuel.”
The retail prices index (RPI) – a wider measure of inflation that includes housing costs – rose to 2.2 per cent in November, up from 2 per cent in October.
The main driver of the rise in CPI came from clothing and footwear price tags, which rose 1.6 per cent between October and November, compared with a 0.1 per cent fall over the same period in 2015.
Retailers held fewer sales in November this year in contrast to last year, while the amount of clothes on sale in October was higher, the ONS said.
Rising fuel prices were also pushing up the cost of living, with petrol prices rising 1.6p a litre to 115.4p between October and November, after falling by 1.5p a litre a year ago. Diesel prices also stepped up 2p a litre to 118p over the period, in contrast to a 0.6p fall last year.
Food and non-alcoholic beverages also pushed higher, climbing 0.4 per cent in November this year, compared with a 0.1 per cent rise in the same month last year.
The move comes on the back of a jump in the price of bread and cereals, including garlic bread and pizza, with milk, cheese and eggs also becoming pricier.