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Is rate rise back on the table as inflation hits a high

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Inflation hits 10-year high The Consumer Price Index rose to 5.1% in the 12 months to November, up from 4.2% a month earlier. The ONS said the contributing factors behind the rise were ‘broad-based’ but transport, especially the cost of petrol, was a big contributor.

On a monthly basis, inflation increased by 0.7% in November 2021, a substantial growth compared with a fall of 0.1% in November 2020.

With UK inflation blew expectations out of the water this morning, with the CPI reading jumping 5.1% in the twelve months to November (up from 4.2% in October) – months ahead of the IMF’s prediction that we’d reach that level in Spring next year. It’s the highest 12-month reading in over a decade. This week, however, inflation itself is not the story. Instead, yesterday’s employment data will be front and centre as the Bank of England meets to discuss tomorrow’s interest rate decision. Doubts about restrictions and their impact on the jobs market have already dashed predictions of a pre-Christmas rate rise. But with inflationary pressure remaining high and with the IMF discouraging the Bank from delaying any further, a change to the base rate is by no means off the table.

Posted by MMB Finance Swindon on 15 December 2021