False summit

12 December 2017 By Aimee Donnellan Follow @aimeedonnellan

Prices rose 3.1 pct in the year to November, the fastest pace in six years. The central bank blames Brexit and says inflation is near peaking. That’s convenient with further interest-rate hikes a risk to sluggish economic growth. But the BoE may not get off so easily.

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Inflation in Britain has soared to its highest level in six years, according to data from the Office for National Statistics released on Dec. 12. The consumer prices index, the official measure of the costs of goods and services, reached 3.1 percent in November, driven by a rise in air fares, chocolate and computer games.

The rise in inflation is more than 1 percentage point above the Bank of England’s 2 percent target, which means Governor Mark Carney will have to write a letter to the chancellor in February to explain how the central bank will manage the situation.

The Bank of England raised interest rates for the first time in a decade last month. It said that inflation was near its peak and would fall to just above 2 percent over the coming three years. It also said a highly anticipated pickup in wage growth would arrive next year.

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