British inflation defied forecasts in November to hold at its highest rate since May, reducing the scope for the Bank of England to inject more cash into the struggling economy.
Data yesterday showed that annual consumer price inflation remained at 2.7 per cent after a surprise jump in October, confounding economists’ forecasts for a dip to 2.6 per cent.
High inflation, which peaked at 5.2 per cent last year, has weighed on consumer spending, holding back the economy’s recovery from its second recession in four years.
A fall in petrol prices was not enough to outweigh increased costs for electricity, gas and food. In addition, services price inflation rose to 4.2 per cent.
Last month, the central bank said inflation was likely to be much higher over the next 18 months than expected in August. It projected it would take until the third quarter of 2014 before inflation fell below the bank’s 2 per cent target. – (Reuters)