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BBC: UK inflation rate rises to 3.1%


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  • Management
  • 12 December 2017
MoneyImage copyright PA

Inflation rose to 3.1% in November, the highest in nearly six years, as the squeeze on households continued.

The Office for National Statistics (ONS) said that airfares and computer games contributed to the increase.

The most recent data shows that average weekly wages are growing at just 2.2%.

Mark Carney, the governor of the Bank of England, will now have to write a letter to Chancellor Philip Hammond explaining how the Bank intends to bring inflation back to its 2% target.

Mr Carney has to write a letter to the chancellor if the Consumer Prices Index (CPI) inflation rate is above 3% or below 1%.

In November, the Bank of England raised its key interest rate for the first time in more than a decade from 0.25% to 0.5%.

However, it is not expected to announce a further increase when it publishes the results of the Monetary Policy Committee's two-day meeting on Thursday.

Mr Carney had said that he expected inflation to peak in October or November.

Lucy O'Carroll, chief economist at Aberdeen Standard Investments, said: "It's quite possible that inflation is now close to its peak. But some of the latest surveys suggest that service sector costs and prices are rising. Given how dominant services are in the economy, this could feed through to inflation overall.

"That means that further interest rate rises are definitely not off the table."

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  • Management
  • 13 December 2017
PaymentImage copyright Getty Images

Wage growth fell behind inflation for a seventh month in a row, according to new employment figures.

The Office for National Statistics said average weekly wages rose by 2.3% in the three months to October, below inflation at 3%.

Real earnings, which takes into account the cost of living, fell by 0.4%

Unemployment declined by 26,000 to 1.43 million, while the jobless rate remained at 4.3%, the lowest since 1975.

However, while unemployment fell, the decline was not as steep as the 59,000 drop recorded in the three months to September.

The pressure on household finances is likely to worsen as the most recent figures for inflation showed a rise to 3.1% in November - the highest in nearly six years.

The number of unemployment benefit claimants rose by 5,900 to 817,500 in November.

Economists had expected the number of claimants, which is considered to be a potential early warning sign of an economic downturn, to rise by 3,200 according to Reuters.

The number of people in employment also dropped, down by 56,000, with men the biggest casualties of the decline.

The level of employment fell by 50,000 for men and by 6,000 for women. The biggest fall in employment was for men aged 18-24 years-old.

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