Inflation rises to six-month high

 
City A.M. Reporter
Consumer price inflation rose unexpectedly to a six-month high of 3.3 per cent in November, driven by rises in the cost of food and clothing, according to the Office for National Statistics.

The figures will disappoint Bank of England policymakers who are concerned that rising commodity prices may aggravate the impact of a rise in value added sales tax which will take effect next month.

However, the Bank has already forecast that inflation will be above three per cent for most of next year and is not expecting it to fall back to the two per cent target until 2012.

The Office for National Statistics said annual consumer price inflation rose to 3.3 per cent last month from October's 3.2 percent. Analysts had expected an unchanged reading.

Bank Deputy Governor Charles Bean said on Monday that policymakers were watching inflationary pressures "like proverbial hawks" and admitted inflation had been uncomfortably above target.

Inflation for food and non-alcoholic beverages rose 5.5 per cent on the year, its biggest rise since May 2009, driven by increases in the cost of bread, cereals and poultry.

Clothing prices rose by an annual 2.1 percent, its fastest rate since comparable records began in 1997.

Slowdowns in the pace of inflation for transport, recreation and culture, and restaurants and hotels to their lowest since 2009 were not enough to stop the rise in the annual rate of consumer price inflation.

On the month, consumer price inflation picked up to 0.4 per cent from 0.3 per cent in October.

The retail price inflation gauge, which includes more housing costs and is the benchmark for many wage deals rose unexpectedly to 4.7 per cent from 4.5 per cent in October.