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| UK inflation rate rises to 3.3% in November | UK inflation rate rises to 3.3% in November |
| (about 1 hour later) | |
| The UK Consumer Prices Index (CPI) annual inflation rate rose to 3.3% in November, up from 3.2% in October, official figures show. | |
| It followed record price rises for the October to November period in food, clothing and furniture, the Office for National Statistics (ONS) said. | |
| CPI inflation remains well above the government target of 2%. | CPI inflation remains well above the government target of 2%. |
| Retail Prices Index (RPI) inflation - which includes mortgage interest payments - rose to 4.7% from 4.5%. | Retail Prices Index (RPI) inflation - which includes mortgage interest payments - rose to 4.7% from 4.5%. |
| Food and non-alcoholic drink prices were up by 1.6% between October and November, compared with a rise of 0.6% a year ago, the ONS said. | |
| Clothing prices also rose by a record amount - of 2% - between the two months, with the biggest price rises found in men's outerwear. | |
| Furniture, household equipment and maintenance also showed a record price rise of 1.6% between October and November. | |
| Spending slowdown | Spending slowdown |
| The Bank of England expects inflation to remain high into next year, pushed higher by rises in VAT from 17.5% to 20% at the start of the year. | The Bank of England expects inflation to remain high into next year, pushed higher by rises in VAT from 17.5% to 20% at the start of the year. |
| Some believe this will provide a screen that will allow retailers to put through more extensive price increases. | Some believe this will provide a screen that will allow retailers to put through more extensive price increases. |
| A report released on Tuesday by KPMG said that 60% of retailers and consumer product manufacturers planned to increase their prices over and above the VAT rise. | A report released on Tuesday by KPMG said that 60% of retailers and consumer product manufacturers planned to increase their prices over and above the VAT rise. |
| A British Retail Consortium spokesman, however, said the report was "nonsense". | A British Retail Consortium spokesman, however, said the report was "nonsense". |
| The inflation rate has now remained above the 2% target by one percentage point or more for 12 months, and the Bank of England's governor, Mervyn King, has had to write four letters to the chancellor this year. | The inflation rate has now remained above the 2% target by one percentage point or more for 12 months, and the Bank of England's governor, Mervyn King, has had to write four letters to the chancellor this year. |
| But with the new government having announced the biggest round of budget cuts since World War II, the Bank still expects the resulting slowdown in spending to bring inflation down over the next two years. | But with the new government having announced the biggest round of budget cuts since World War II, the Bank still expects the resulting slowdown in spending to bring inflation down over the next two years. |
| Commenting on the inflation figures, BNP Paribas economist Alan Clarke, said: "It's a disappointing number and it's only going to get worse in the next couple of months." | |
| "Next month is utility bills, the month after that is VAT, it's all one-way traffic at the moment." |