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Inflation has continued to surge higher in November as record fuel prices, soaring energy costs and increased food prices ramped up the cost of living for families ahead of Christmas.
The Consumer Prices Index (CPI) rose by 5.1% in the 12 months to November 2021, up from 4.2% in October, the Office for National Statistics (ONS) revealed this morning.
It is the highest figure recorded for more than a decade, when it stood at 5.2% in September 2011, and more than twice the Bank of England’s target rate of 2%.
Average petrol prices jumped to the highest level recorded by the ONS at 145.8p a litre in November, while the cost of second-hand cars also contributed to the rise in inflation.
Food and non-alcoholic drinks prices also started to have an upward contribution, rising 1% this year. The ONS identified sugar, jam, syrups, chocolate and confectionery as having a noticeable effect.
Prices of alcohol and tobacco rose by 2.6% as duty rates announced in the Autumn 2021 Budget came into force. There were also smaller upward contributions from spirits, wine and beer.
ONS chief economist Grant Fitzner said: “A wide range of price rises contributed to another steep rise in inflation, which now stands at its highest rate for over a decade.
“The price of fuel increased notably, pushing average petrol prices higher than we have seen before.
“Clothing costs - which increased after falling this time last year - along with price rises for food, second-hand cars and increased tobacco duty all helped drive up inflation this month.”
Morning update
It’s a quiet morning on the markets as the City begins to slow down ahead of the Christmas break.
The FTSE 100 continued its downward slide this morning, falling 0.2% to 7,204.14pts on the back of the gloomy inflation figures.
Earlier losers include Ocado, which shed some of yesterday’s gains to fall 2.9% to 1,629p, McColl’s Retail Group, down 2.5% to 11.5p, Naked Wines, down 1.7% to 643p, and Hotel Chocolat Group, down 1.3% to 503.3p.
Soft drinks firms AG Barr and Nichols got off to a good start, rising 3.3% to 533p and 2.6% to 1,354.3p respectively, while Finsbury Food Group is up 1.9% to 96p and Devro is up 1.7% to 206.5p.
Yesterday in the City
The FTSE slipped back again yesterday, falling 0.2% to 7,218.64pts as inflation fears continued to plague the markets.
Ocado escaped the gloom to have a storming day after a big victory in a patent dispute with AutoStore helped offset a mixed fourth-quarter trading update. Shares climbed 7.3% to 1,707.3p.
Poundland owner Pepco fell 4% to 47 Polish zloty after warning of commodity inflation, higher shipping costs and ongoing supply chain disruption. However, its financials for the year ended 30 September were strong, with revenues up 17.2% to €4.1bn.
Other fallers included Hellofresh, down 4.1% to €70.22, Naked Wines, down 3.8% to 654p, and Bakkavor, down 1.5% to 121.2p.
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