UK inflation rises to 2.6% in November

This marks a rise from 2.3% in October and signifies a worrying trend for both consumers and policymakers as inflation has now surpassed the Bank of England’s target of two percent.

Chancellor of the Exchequer Rachel Reeves addressed the situation, emphasising that it highlights the ongoing struggles faced by families across the nation and that “for too long the economy has not worked for working people.”

She pointed to recent measures intended to alleviate financial pressures, including no increases in national insurance or VAT, a boost of £1,400 to the national living wage, and a freeze on fuel duties. However, the timing and execution of these measures have received criticism.

Shadow Chancellor Mel Stride articulated concerns regarding the implications of these rising inflation figures. He asserted that the current situation could result in "higher costs in the shops, less money in working people’s pockets and risks keeping mortgage rates higher for longer." 

Stride attributed inflation to what he referred to as a series of “irresponsible and inflationary decisions” made by the Treasury, suggesting that the financial landscape could become more challenging for British consumers.

In light of these developments, economic analysts have provided varying perspectives on the future. Economists believe there’s “no immediate cause for concern” regarding the figures, aligning them with the forecasts of the Bank of England however caution that stifled growth could emerge due to the bank’s high interest rates, which may limit borrowing and spending in the economy.

The inflationary pressures intensify on the backdrop of policies introduced by the government in the recent budget, which include substantial hikes to national insurance that are projected to significantly affect businesses.