ANNUAL UK inflation soared above five per cent to its highest in more than a decade in November, on the back of a record surge in petrol prices to an all-time high, official data show.
The rise in annual consumer prices index inflation from 4.2% in October to 5.1% last month, revealed in figures published by the Office for National Statistics, was much greater than expected.
Inflation is now more than two-and-a-half times the 2% target set for the Bank of England by the Treasury.
Average petrol prices stood at 145.8 pence per litre in November, compared with 112.6p a litre a year earlier, the ONS noted. The November 2021 price is the highest recorded.
The average price of petrol rose by 7.2 pence per litre between October and November 2021, the largest monthly rise since cmparable records began in 1990, the ONS noted.
Martin Lawrence, director of investments at financial services mutual Wesleyan, said: “Inflation has continued to sail far beyond the Bank of England’s 2% target, with rising hotel and restaurant prices, a tangled supply chain and labour shortages continuing to push it off course.”
And he warned: “We could be heading towards inflationary storm clouds early next year, especially if Ofgem raises the energy price cap for consumers in April – meaning household bills could soar.”
Mr Lawrence added: “The Omicron variant has not caused international markets to plunge into troubled waters yet, but the uncertainty surrounding new variants may cause central banks to pause plans to raise interest rates and, coupled with prolonged inflation, this is a perfect storm for savers who should be considering their options when it comes to growing their hard-earned money.”
Ed Monk, associate director at Fidelity International, said: “Prices took another leap upwards in November and the headline CPI rate is now above 5% – a level most believed would not be hit until well into next year. The growth in the rate of price rises since just March has been remarkable and shows no sign of abating. Reports of a record number of manufacturers hiking prices this past week suggests the squeeze on households has much further to go.
“Despite that, interest rates – the traditional tool for curbing inflation – are expected to remain at their record low level of 0.1% when the Bank of England announces its latest monetary policy decision tomorrow. The Bank is currently caught between its two primary functions – controlling inflation and ensuring financial stability. With inflation already so far above its 2% target, getting prices under control would appear a pressing priority. The problem is that there is clearly a concern that the economy is too weak to withstand any increase in borrowing costs. Weak GDP growth of just 0.1% last month shows how little momentum there is in the economy right now.”