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Inflation rises to 3.3% in November

Inflation has increased to 3.3% in November, up from 3.2% in October, data from the Office for National Statistics shows.

Food and non-alcoholic beverages, and clothing were the main drivers behind price increases.

While recreation, culture, air transport and petrol were the key downward pressures.

Inflation by the Retail Price Index grew to 4.7% in November, compared to 4.5% in October.

Jonathan Loynes, chief European economist at Capital Economics, says these figures will do little to ease current concerns over the continued stubbornness of UK inflation.

He says: “These increases might largely reflect temporary timing effects ahead of January’s VAT hike – note that measures of inflation supposedly stripping out tax effects remain very low at around 1.5%.

“Nonetheless, there is a clear concern that core price pressures are simply not responding to the apparent spare capacity in the economy in the way that the MPC – and we – had expected.

He says there is no reason for the MPC to panic but if inflation remains high it may have to adjust monetary policy just when the fiscal squeeze hits home.

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