UK inflation hits decade high, pressuring Bank of England

Dec 15, 2021, 1:44 AM | Updated: 10:59 am

LONDON (AP) — Consumer prices in the United Kingdom are rising at their highest rate in over a decade as a result of soaring energy costs and blockages in the supply chain, official figures showed Wednesday, a day before a highly anticipated interest rate decision from the Bank of England.

The Office for National Statistics found that inflation rose by 5.1% in the year to November, up dramatically from October’s 4.2% with widespread surging prices across a raft of goods and services, including for fuel, energy, cars, clothing and food,

The increase was more than the 4.8% consensus of economists’ forecasts and takes inflation to its highest level since September 2011. Around the world, countries are recording multiyear high levels of inflation. The United States saw its inflation rate spike to 6.8% in the year to November, the highest level in nearly 40 years. In the 19 countries that use the euro currency, the rate hit 4.9%, the highest since recordkeeping began in 1997.

The latest spike in the U.K. is likely to ramp up pressure on the central bank to raise interest rates Thursday, with inflation running at more than double the bank’s target of 2%.

Economists are split as to whether there will be a majority among the bank’s nine-member Monetary Policy Committee to raise the benchmark rate from a record low of 0.1%. If it were to do so, it would be the first central bank within the Group of Seven industrial economies to raise borrowing rates since the coronavirus pandemic began nearly two years ago.

Two members backed a rate increase to 0.25% at the last meeting in early November, and it would take another three to join. But the recent emergence and spread of the omicron variant of the coronavirus has increased speculation that the panel will wait.

With infections widely anticipated to hit levels not seen before during the pandemic and new restrictions imposed, there are worries over the already muted economic recovery in the U.K.

“Inflation is close to being further above the target than at any point since the U.K. started targeting inflation in October 1992,” said Paul Dales, chief U.K. economist at Capital Economics. “This makes tomorrow’s interest rate decision look closer, but on balance we think the Bank of England is more likely to keep rates at 0.1% until it learns more about the omicron situation.”

An interest rate increase, however modest, would increase many loans and mortgages. For households juggling their Christmas budgets, it’s the last thing they need.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


In this photo provided by Grand Canyon National Park, an adult bison roams near a corral at the Nor...
Associated Press

Grand Canyon won’t seek volunteers to kill bison this fall

A bison herd that lives almost exclusively in the northern reaches of Grand Canyon National Park won't be targeted for removal this fall.
5 hours ago
A police officer and paramedic give the first aid to a woman wounded by the Russian shelling in cit...
Associated Press

Russia ‘pouring fire’ on Ukrainian city as offensive mounts

SLOVIANSK, Ukraine (AP) — Russia was mounting an all-out assault on the last Ukrainian stronghold in the eastern Luhansk region, “pouring fire” on the city of Lysychansk from the ground and air, the local governor said Monday, as Western leaders met to discuss ways of bolstering support for Kyiv. Luhansk Gov. Serhiy Haidai said Russian […]
5 hours ago
South Korean Unification Minister Kwon Youngse speaks during a news conference in Seoul, South Kore...
Associated Press

Seoul urges China, Russia to prevent North Korean nuke test

SEOUL, South Korea (AP) — A top South Korean official said Monday that North Korea is increasingly targeting the South with its nuclear arms program, and urged China and Russia to persuade the North not to conduct a widely expected nuclear test. Unification Minster Kwon Youngse’s comments came after North Korean leader Kim Jong Un […]
5 hours ago
FILE - Pipes at the landfall facilities of the 'Nord Stream 2' gas pipline are pictured in Lubmin, ...
Associated Press

EU countries adopt mandatory gas storage amid Russia’s cuts

BRUSSELS (AP) — European Union countries agreed Monday that all natural gas storage in the 27-nation bloc should be topped up to at least 80% capacity for next winter as they prepare for the possibility of Russia further reducing deliveries. The EU is trying to slash its use of Russian energy amid the Kremlin’s war […]
5 hours ago
Water-filled barriers have been installed by police outside the Hong Kong Convention and Exhibition...
Associated Press

Will he go or not? Hong Kong awaits word on Xi Jinping visit

HONG KONG (AP) — Will he go or not? Chinese President Xi Jinping kept Hong Kong guessing on Monday about his possible appearance at the 25th anniversary of the former British colony’s return to Chinese rule. The government has yet to say whether he will be physically present for the events, which include the inauguration […]
5 hours ago
A Norwegian national flag flutters over flowers and rainbow flags that are placed at the scene of a...
Associated Press

Norway: Suspect in deadly Pride shooting agrees to custody

OSLO, Norway (AP) — The suspect in Saturday’s mass shooting during an LGBTQ festival in Oslo has agreed to be held in pretrial custody for four weeks and will therefore not appear in court on Monday, a Norwegian court said. Zaniar Matapour, a 42-year-old Norwegian citizen originally from Iran, was arrested shortly after the predawn […]
5 hours ago

Sponsored Articles


Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

ADHS mobile program brings COVID-19 vaccines and boosters to Arizonans

The Arizona Department of Health Services and partner agencies are providing even more widespread availability by making COVID-19 vaccines available in neighborhoods through trusted community partners.
Canvas Annuity

The secret to guaranteed retirement income

Annuities aren’t really a secret, but they are so misunderstood that they might as well be. Once you understand what an annuity is and how it can benefit you, you could decide this “secret” is the perfect supplement to your retirement plan.
UK inflation hits decade high, pressuring Bank of England