UK inflation has reached its highest level since March, fueled by rising petrol and clothing costs.
- The Consumer Prices Index (CPI) rose to 2.6% in November, marking the second consecutive increase.
- Motor fuel and clothing prices have increased, while air fares saw a significant drop.
- Chancellor Rachel Reeves expressed concern for families struggling with the cost of living.
- Retailers face challenges from increased costs and are seeking supportive government measures.
UK inflation has reached a concerning peak, driven by an increase in the costs of petrol and clothing last month. According to the Office for National Statistics, the Consumer Prices Index (CPI) rose to 2.6% in November, up from 2.3% in October. This marks the second month of rising inflation, adding pressure on consumers and the economy.
Grant Fitzner, the chief economist at the ONS, highlighted that the rise in inflation stems from higher prices for motor fuel and clothing, which have increased this year compared to a decrease the previous year. Although air fares have traditionally declined at this time of year, they experienced their largest drop in November since records began at the start of the century, partially offsetting the overall inflation rate.
The inflation rate for food, non-alcoholic drinks, alcohol, and tobacco also saw an upward trend in November, contributing to the overall increase. This uptick in inflation has prompted a reaction from Chancellor Rachel Reeves, who remarked on the ongoing economic challenges, stating, “I know families are still struggling with the cost of living and today’s figures are a reminder that for too long the economy has not worked for working people.”
The British Retail Consortium director of insight, Kris Hamer, explained that retailers are striving to maintain affordability for customers during the festive season, despite global price pressures. Hamer noted that the retail sector operates on low margins and faces approximately seven billion pounds in increased costs from higher employer National Insurance, the National Living Wage, and new packaging levies. These additional costs, he warned, could lead to price hikes, job losses, and increased vacancies in high street stores.
Retailers are also monitoring proposed changes to business rates closely to ensure that no store ends up paying more in rates than before. It is deemed essential by the industry that the government protects stores to support continued investment in keeping shops open and prices down.
The rise in UK inflation poses significant challenges for both consumers and retailers, necessitating careful monitoring and strategic responses.
