• Howard Archer: Further quantitative easing unlikely
Official figures showed that the consumer prices index (CPI) measure of annual inflation hit 3.3 per cent last month, up from 3.2 per cent in October. Analysts had been forecasting no change.
The increase was driven by a 1.6 per cent rise in food prices in November and 2 per cent jump in clothing costs - the sharpest increases for both sectors in November since records began.
It marks the 11th consecutive month that CPI has been at least a single percentage point above the Bank of England's 2 per cent target. The figures are likely to add to policymakers' concerns that rising inflation expectations among the British public may trigger a wage-price spiral.
The retail prices index (RPI) rate of inflation - traditionally used by trade unions as a benchmark for wage talks - now stands at 4.7 per cent, up from 4.5 per cent in October, according to the Office for National Statistics.
Inflation looks set to rise even higher at the start of next year when VAT jumps to 20 per cent from 17.5 per cent and utility firms jack up tariffs.
Sterling rose and gilts fell in the wake of the data, which reinforced expectations the central bank's next move will be to tighten monetary policy, probably towards the end of 2011.
Howard Archer, chief UK economist at forecasting group IHS Global Insight, said the Bank would "undoubtedly be concerned" by the inflation figures.
"The big worry for the Bank is that rising inflation will fuel inflation expectations, although it is questionable whether that would feed through to lift wages given high unemployment," Archer said.
"We do not think the slowdown in economic activity in 2011 will be sufficient to push the Bank of England into more quantitative easing given persistently sticky, above-target consumer price inflation."
That view was echoed by UBS economist Amit Kara, who said: "With … inflation persistently above the target, there is now a negligible chance that the Bank of England embarks on another round of QE."
So far, expectations of inflation remain well anchored, but this may be tested over the coming months, particularly if the economy shows resilience in the face of public sector spending cuts.The UK economy enjoyed its best six-month performance in a decade between April and September, and both the Bank and the government are confident growth will continue through 2011.
The Bank's nine-strong monetary policy committee has resisted lifting interest rates from a historic low of 0.5 per cent to curb inflation.
Howard Wheeldon, senior strategist at BGC Partners, said: "For now in terms of both targets and rates nothing is likely to change - interest rates will remain on hold for a good while yet before in our view edging up a very small quarter of a point some time in the second half of next year."
The British Chambers of Commerce renewed its plea not to raise borrowing costs in the face of higher inflation.
David Kern, chief economist, said: "Given the dangers facing the economy, we urge the MPC to persevere with current expansionary policies and maintain low interest rates for as long as possible."