India's Nov consumer inflation accelerates to 4.88 pct y/y

Ann Santiago
December 12, 2017

United Kingdom shares were flat on Tuesday as investors await inflation figures, which some economists believe could show prices rising at their fastest rate since 2012, putting pressure on the Bank of England to further raise rates.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month rate was 2.8% in November 2017, unchanged from October 2017.

This comes after many economists stated their belief that inflation had peaked following the Bank of England's (BoE) decision to raise interest rates from their historic low of 0.25% to 0.5% last month.

The ONS said the largest upward contribution to change in the CPI rate came from air fares, which fell between October and November but by less than a year ago.

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.

Rising oil prices saw producer input price inflation pick up to 7.3% in November from 4.8% in October, while output price inflation only edged up to 3% from 2.8%.


Inflation's sharp rise over the past year or so is directly related to Britain's vote in June 2016 to leave the European Union.

"Given Carney and colleagues raised interest rates last month, he'll also be able to point to the fact that, for once, he's doing something about it too".

"It's quite possible that inflation is now close to its peak", said Lucy O'Carroll, chief economist at Aberdeen Standard Investments.

"Too much inflation could threaten the Bank's credibility and therefore its grip on the economy", she says. The CPI in November 2017 saw a monthly growth of 1.1 per cent in comparision to October 2017, whereas Consumer Food Price Index rose 1.58 per cent.

"We at Assocham expect that domestic conditions for growth will improve gradually, mainly driven by consumption demand, which is expected to strengthen with implementation of the Seventh Pay Commission and government stimulus package to revive the economy", he added.

"That'll be of small comfort, however, to households facing a significant increase in the cost of Christmas this year".

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