The Consumer Prices Index (CPI) rose by 2.6% in the 12 months to November 2024, up from 2.3% in the 12 months to October, according to data from the Office for National Statistics (ONS).
The Consumer Prices Index including owner-occupiers’ housing costs (CPIH) rose by 3.5% in the 12 months to November 2024, up from 3.2% in the 12 months to October.
Nevertheless, this was down from a recent peak of 9.6% in October 2022
On a monthly basis, CPIH rose by 0.2% in November 2024, compared with a fall of 0.1% in November 2023.
On a monthly basis, CPI rose by 0.1% in November 2024, compared with a fall of 0.2% in November 2023.
The owner occupiers’ housing costs (OOH) component of CPIH rose by 7.8% in the 12 months to November 2024, up from 7.4% in the 12 months to October.
This was the highest annual rate since February 1992 in the constructed historical series.
OOH costs rose by 0.8% on the month, compared with a 0.4% increase a year earlier.
The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from transport, with a further large upward effect in CPIH from housing and household services.
Core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.4% in the 12 months to November 2024, up from 4.1% in October.
The CPIH goods annual rate rose from negative 0.3% to positive 0.4%, while the CPIH services annual rate rose from 5.6% to 5.7%.
Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.5% in the 12 months to November 2024, up from 3.3% in October.
The CPI goods annual rate rose from negative 0.3% to positive 0.4%, while the CPI services annual rate was unchanged at 5.0%.
Reaction:
Simon Webb, managing director of capital markets and finance at LiveMore:
“This latest rise in inflation isn’t surprising, bearing in mind financial market reactions to the Autumn Budget and the hike in energy bills.
“It’s not great news for consumers still straining to make payments.
“This financial climate can be particularly challenging for borrowers aged 50 to 90 plus.
“Mid-life borrowers are struggling to get on the housing ladder, while borrowers who have come to the end of their interest-only term and can’t pay off the capital, mistakenly believe themselves to be trapped on their lenders’ standard variable rates.
“Many aren’t mortgage prisoners at all but are eligible for affordable specialist and mainstream loans aimed specifically at these age groups.
“These latest inflation figures will probably reinforce predictions that the Bank of England will skip a December cut in the Bank Rate.”
Peter Stimson, head of product at MPowered Mortgages:
“This is not the Christmas present the Bank of England wanted.
“Inflation is surging deeper into warning territory and the Bank’s efforts to hold CPI at 2% are unravelling fast.
“Optimists will cling to the idea that November’s surge in inflation was widely expected, and is partly the fault of a one-off jump in energy bills.
“But no one should expect the rising inflationary pressure to ease on its own.
“Core inflation, which strips out volatile factors like energy and food costs, continues to ratchet up and now stands at 3.5%.
“Separate data published by the ONS yesterday showed wage inflation is rising for the first time in a year, which will also feed into consumer inflation in coming months.
“In response the Bank of England’s approach to interest rates will need to be far more hawkish than many had hoped.
“The next reduction in the Bank’s base rate – which the markets had expected to be in early 2025 – may now come later.
“This will be a worry for anyone planning to buy their first home or remortgage in the New Year.
“While mortgage lenders will try to trim their interest rates in January in an effort to win borrowers’ business, their ability to do so will now be severely constrained.
“The Bank of England’s battle against inflation is back on and the prospect of cheaper mortgages is off the table for now.”
Nick Hale, CEO of Movera:
“There is little festive cheer in today’s figure which marks the second consecutive month that inflation has risen.
“Driven by higher energy costs and services inflation, the figure is even further adrift from the Bank of England’s target.
“Christmas is unlikely to come early on Thursday either, as the Bank of England’s Monetary Policy Committee is predicted to hold off on lowering interest rates.
“It would be good to think that the rise is a temporary blip. But there are too many unknowns, including the longer term impacts of the Government’s Budget which has so far rattled business confidence.
“What is certain is that we are still in the midst of a housing crisis. To give homebuyers a much-needed confidence boost, we can only hope that the Bank of England’s New Year resolution will be to lower interest rates as soon as it can.”
Paul Noble, CEO of Chetwood Bank:
“This latest rise in inflation is a financial gut punch for Britons preparing for the year’s most expensive season.
“It comes as no surprise following the uncertainty surrounding October’s budget announcement and could be a sign of a prolonged period of inflation above the government’s target.
“All eyes will now be on the Bank of England’s interest rate announcement on Thursday to see how they react to this news.
“With inflationary pressure still unrelenting, consumers must be more proactive than ever about managing their money – missing out on competitive rates and leaving funds in old savings accounts, or their current account, is just leaving money on the table.
“Financial institutions must play their part by providing products and support that can help Britons navigate yet another tricky economic period.”
