British consumer price inflation rose last month at its fastest annual pace since May, propelled by fuel prices.
The Office for National Statistics (ONS) said consumer prices rose an annual 1.9 per cent last month, up from 1.5 per cent in October and a five-year low of 1.1 per cent in September. Analysts had expected the annual rate to rise to 1.8 per cent.
There was little market reaction to the data, since the Bank of England has said it will look through what it expects to be just a short-term rise in inflation when deciding on when to start tightening monetary policy.
The central bank has said inflation could rise above 3 per cent after a temporary cut in value-added tax is reversed on January 1st. However, it does not expect this rate to become entrenched because elevated levels of unemployment and spare capacity are likely to persist for a while as the economy recovers from recession.
The ONS said transport costs -- which are dominated by fuel -- added nearly 0.5 percentage points to the annual rate of inflation. CPI would have been even higher if food and non-alcoholic beverages had not reduced year-on-year inflation by 0.1 percentage points.
Petrol prices rose 2.9 pence per litre in November but fell 9.3 pence per litre in the same month a year ago, the ONS said.
Even excluding volatile components such as energy and food, inflation rose faster than expected. Core CPI increased at an annual 1.9 per cent in November -- the highest since November 2008 -- from 1.8 per cent in October.
The Retail Price Inflation (RPI) price gauge, a broader measure which includes housing costs, rose an annual 0.3 per cent, also slightly more than expected and the highest year-on-year pace of increase since December 2008.
RPI inflation has been negative for much of the past year.
Reuters