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Food and clothing push up inflation

Britain's cost of living jumped again in November at the fastest pace seen in six months after a record surge in food and clothing prices.

The Consumer Prices Index (CPI) rate of inflation was 3.3% last month, up from 3.2% in October, official figures showed, and is likely to increase in the months ahead in the face of soaring energy costs and next month's hike in VAT.

The figures will apply pressure on the Bank of England - tasked with bringing the rate of inflation down to a 2% target - to raise interest rates sooner rather than later.

The majority of rate-setters at the Bank expected the stubbornly-high inflation due to temporary price shocks, such as volatile food and petrol costs.

With the pace of the UK's recovery expected to slow and create slack in the economy, the Bank's Monetary Policy Committee has so far resisted lifting interest rates from a historic low of 0.5% to curb inflation.

But MPC member Andrew Sentance, who has been alone in voting for a rate-hike to 0.75% in recent months, re-iterated his argument in favour of tightening policy in light of the figures.

He told the BBC's World at One: "The worry I would have is that if we don't begin to move interest rates up gradually now we will find further down the track we actually have to move them up more sharply. That could deliver a bigger jolt to confidence in the economy in the future."

The increase was driven by a 1.6% rise in food prices and 2% in clothing costs - the highest increases for both sectors in an October to November period since records began.

The rise in food prices was driven by an increase in flour, breakfast cereals and poultry costs.

The ONS said there was anecdotal evidence to suggest crop problems seen in countries including Russia earlier this year could be contributing to the rise in food costs.


From Belfast Telegraph