Inflation jumps to its highest level in nearly 6 years, hitting 3.1%

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December 12, 2017 10:36 AM

The UK's latest inflation numbers were published on Tuesday morning.

Inflation jumps to its highest level since March 2012, as Brexit related price increases continue.
Economists had predicted that inflation would remain flat at 3%, but it rose to 3.1%.
The sharp fall in the value of the pound following the UK's vote to leave the EU last year has raised the cost of imports.
Bank of England Governor Mark Carney must now write a letter to Chancellor Philip Hammond.

LONDON — Inflation climbed to another fresh high in November, coming close to its highest level in six years, as the impact of Brexit continues to hit the price of goods in the UK.

The Office for National Statistics said on Tuesday that the UK's Consumer Prices Index (CPI) inflation rate — the key measure of inflation — was 3.1% in November, above consensus estimates, and a little higher than the 3% seen for the three previous months.

CPI measures the weighted average of prices of a basket of goods and services, such as food, transportation, and medical care.

November's reading marks the highest rate of consumer price inflation since March 2012, when prices rose an average 3.5%.

The sharp fall in the value of the pound following the UK's vote to leave the EU last year has raised the cost of imports and pushed up the rate of inflation. Most major forecasters believe that inflation's peak is likely to be somewhere around the mark reached in the latest data.

Pantheon Macroeconomics' Samuel Tombs points out that November's rising inflation "

Inflation's impact on the British economy is being exacerbated by the fact that real wages are actually growing more slowly than prices are rising, meaning that the average Brit is actually seeing the amount of money they have to spend decrease.

The ONS' latest wage growth numbers will be released on Wednesday, helping to create a fuller picture of just how intense the squeeze on Britain's consumers is right now.

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