Christmas squeeze fears as UK inflation hits highest level since 2012
2 min read
UK inflation has risen to a six-year high of 3.1%, prompting concern over squeezed living standards.
The latest official statistics show that CPI inflation rose by 0.1 percentage points between October and November this year, putting the figure well above the Bank of England’s target of 2%.
The increase is being driven by rising oil prices and a fall in the value of the pound.
Bank of England Governor Mark Carney will now have to write to the Chancellor explaining why the rate has gone over 3% and how he is going to reduce it.
The news comes as further blow to Philip Hammond, who had to reveal in last month’s Budget that UK growth forecasts had been significantly downgraded.
Mr Carney announced the first interest rate rise in a decade at the beginning of November, in an attempt to control inflationary pressures.
Speaking at the time, he said the hike was necessary “to achieve a sustainable return of inflation to target”.
He also blamed Brexit for the economic conditions that had prompted the move.
“We must aim to bring inflation back to target and keep it there once the effects of temporary factors, currently predominantly those caused by the referendum-related fall in sterling, dissipate,” he said.
Responding to today’s inflation figures, Shadow Chief Secretary to the Treasury, Peter Dowd warned that the cost of living squeeze would hit vulnerable families.
He said: “We shouldn’t forget that there will be millions of working families who will be struggling this Christmas already as a direct result of government policies such as the benefits freeze and the public sector pay cap.
"This is a further reminder of just how bad this double whammy of rising prices and Tory austerity policies will be this month for them.”
The TUC’s Frances O’Grady noted that with food prices rising at twice the rate of wages “Christmas dinner is going to be a lot more expensive this year”.
She added: “The Government is failing to deal with Britain’s cost of living crisis. Working people need a pay rise. They shouldn’t have to worry about putting the turkey on the table.”
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