Bank likely to hold interest rates as inflation hits 2.6%

UK inflation has risen to its highest level in eight months, adding to pressure on the Bank of England to keep interest rates unchanged today despite a slowdown in the British economy.

- Richard Partington

The consumer prices index rose by 2.6% last month from 2.3% in October, driven by the rising cost of petrol, groceries and an increase in tobacco duty in the budget.

The reading from the Office for National Statistics, which matched City economists' forecasts, showed the headline rate rising further above the Bank's 2% target for a second consecutive month.

The ONS snapshot showed that the average price of petrol rose by 0.8p a litre between October and November 2024 to stand at 134.8p a litre, while the price of diesel rose by 1.4p a litre to 140.5p. Air fares fell by 19.3% on the month, compared with a fall of 13.9% a year ago.