Inflation reaches six year high

Inflation rose to 3.1% in November, the highest in nearly six years, according to the Office for National Statistics (ONS).

In contrast, recent data shows that average weekly wages are growing at just 2.2%. The discrepancy now means Mark Carney, the governor of the Bank of England, will have to write a letter to Chancellor Philip Hammond explaining how the Bank intends to bring inflation back to its two per cent target.

Speaking with the BBC, Lucy O’Carroll, chief economist at Aberdeen Standard Investments, said, ‘It’s quite possible that inflation is now close to its peak. But some of the latest surveys suggest that service sector costs and prices are rising. Given how dominant services are in the economy, this could feed through to inflation overall.

‘That means that further interest rate rises are definitely not off the table.’