UK inflation rises to 1.9% in November

| December 15, 2009 | 0 Comments

The Office for National Statistics has today announced that Consumer Price Inflation (CPI) rose again for the second consecutive month to 1.9%, up from 1.5% in October and a sharp rise from the 5-year low of 1.1% in September.

The latest figure means CPI is just slightly under the Bank of England’s target of 2% and was close to analysts forecasts of 1.8%.

Meanwhile, Retail Price Inflation (RPI), which includes mortgage costs and is used as the basis for many wage deals, rose to 0.3% from a rate of -0.8% in October. RPI inflation has been negative for much of the last year.

However, today’s figures are unlikely to cause concern after the Bank’s Governor, Mervyn King, recently warned that inflation could “rise sharply over the next few months” - many analysts believe it could exceed the 3% mark.

According to Mr King, the rise in inflation would be as a result of the VAT rate, which is set to revert back to the 17.5% mark again in January 2010.

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