Higher Food Costs Add To Inflation Woes
The main rate of inflation remained unchanged in November as falling petrol prices failed to offset rises in many basic foodstuffs and home energy costs.
The Office for National Statistics calculated that the CPI measure remained at an annual rate of 2.7% in November.
Many economists had expected the figure to fall back slightly ahead of further increases in the rate next month as many rises in household energy bills filter into the statistics.
The ONS said the first increase in bills to take effect, by supplier SSE, was included in November's figures.
But with hikes by the other five main energy providers set to come into force, analysts think CPI inflation will peak at 3.5% by mid-2013.
Upward pressure from gas and electricity prices pushed housing and household services inflation up by 0.6%, the ONS said, while increases in the price of fruit, bread and cereals also added pressure to the CPI rate.
But a fall in the cost of transport was the biggest factor which kept the rate steady as petrol prices fell by 3p to £1.35 per litre on average while diesel dropped 1.5p to £1.42.
The RPI measure of inflation, which includes housing costs, fell to 3% in November from 3.2% in October as transport costs and mortgage interest payments fell.
In its quarterly forecasts revealed last month, the Bank of England expected inflation to remain significantly higher over the next 18 months than it had previously expected.
It was that factor which is thought to have prevented the bank adding to its bond purchase programme, known as quantitative easing, to boost money supply in the UK economy despite evidence of continuing sluggish growth.
Commenting on the figures, the TUC general secretary Brendan Barber said: "The stubbornness of inflation, combined with poor wage growth, is putting real pressure on people's finances in the run-up to Christmas.
"With the Office for Budget Responsibility not expecting real wage growth until 2014 and further cuts to in-work benefits due this April, 2013 looks like being another tough year for working families.
"Today's figures are also another reminder of how painful the forthcoming benefits uprating cap will be for low-income families."
what do you think?
Strange how the CPI fell suddenly to 2.2 % for September, the month used to calculate the increase in pensions etc ,then shot back up to 2.7% in October remaining the same for November.
Nigel - 'lies, darn lies and bl..dy statistics'.
Nigel as it is based on a 12 month period it makes little or no difference what happens in a single month
How economists could expect the figures to fall when food prices are bound to rise given that many crops could not be got in due to the weather makes me wonder where they get the predictions from
Windows Live User
A lot of crops rotted off and couldnt be brought in. Shame though as supermarkets see this as a real opportunity for them
Cheaper petrol leads to more car use and more CO2. Hence more climate change which causes crops to be ruined. A vicious circle which must be broke. Petrol needs to be more expensive.
Can you please provide some empirical evidence to support this theory
tyne i expect you also believe Father Christmas will be poping down folks chimmneys very soon.
Windows Live User
cheaper fuel wouldnt make the slightest difference to how much I use my car. I bet thats the same for many More expensive fuel would have no impact on my mileage neither. It is a means to an end only
tyneview. I am surprised that you still believe in the global warming fairy tale. What next Newcastle to win the cup ??
35 year ago the car I drove did 15-18 to the gallon - the car I now drive with same size engine does 55 to the gallon 35 year ago we all had coal fires to heat the house and no loft or wall insulation I have a highly efficient gas boiler and 300mm of insulation in the loft, I pay no road tax as the car produced very little CO2 greater efficiency means less co2 - why did we not suffer the same then ? This is just part of the natural weather cycle
Someone ought to tell the supermarkets because they seem to think inflation is above 20%!
No thats how much they put stuff up by each week
The price of food in 12 months has increased by 75%. Petrol and diesel has stayed high, Gas and electricity has increased by 40% In fact all normal household prices have soared, but Osborne tells the ONS to cut CPI so he is a real lying man and should be sentenced to life in prison