British Inflation Jumps to 1.2 Per Cent

(AFP) – British annual inflation jumped in November to the highest level in more than two years as a slide in sterling since the Brexit vote lifted fuel costs, data showed Tuesday.

The 12-month inflation rate hit 1.2 percent compared with 0.9 percent in October, the Office for National Statistics (ONS) said in a statement.

Analysts’ consensus forecast had been for a gain to 1.1 percent.

“The Consumer Prices Index (CPI) rose by 1.2 percent in the year to November 2016, compared with a 0.9 percent rise in the year to October. The rate in November was the highest since October 2014, when it was 1.3 percent,” the ONS said in a statement.

It added that rises in the prices of clothing and motor fuels contributed to the increase, offsetting falls in the cost of air and sea travel.

“Fuel prices tend to reflect movements in oil prices and part of the increase in oil prices during 2016 to date can be explained by depreciation of sterling against the US dollar,” the ONS said.

The British pound has faced heavy pressure since Britain voted in June to exit the European Union, resulting in higher import costs.

“Sterling weakness continues to raise the cost of inputs for UK businesses, and there are signs these cost increases are slowly being passed on to consumers,” noted Ben Brettell, senior economist at Hargreaves Lansdown stockbrokers.

“This in turn could hit consumer spending, which has so far held up well despite Brexit-related uncertainty.”