UK inflation reaches two-year high

The UK’s rate of inflation rose to 1.2% in the year to November 2016, compared with a 0.9% rise in the year to October, the Office for National Statistics (ONS) said on Tuesday.

Higher prices for clothing and fuel were the main contributors to the increase in the Consumer Prices Index (CPI). In particular, higher prices for winter coats were behind a 1.6% increase in the cost of clothing between October and November.

Petrol prices rose 1.6p a litre between October and November, after falling by 1.5p a litre a year ago. Diesel prices were 2p a litre higher, compared with a 0.6p fall last year.

Last month’s rate of CPI inflation was the highest since October 2014, when it stood at 1.3%.

The CPI rose by 0.2% between October and November 2016.

UK manufacturers also saw higher prices in November, according to a separate report from the ONS which revealed that the price of goods bought and sold by UK manufacturers rose for the fifth consecutive month following two years of falls.

Factory gate prices (output prices) for goods produced by UK manufacturers went up by 2.3% in the year to November 2016, compared with an increase of 2.1% in the year to October 2016.

Core factory gate prices, which exclude the more volatile food, beverage, tobacco and petroleum products, rose 2.2% — the largest increase since February 2012.

Meanwhile, the overall price of materials and fuels bought by UK manufacturers for processing (total input prices) increased by 12.9% in the year to November 2016, up from a rise of 12.4% in the year to October 2016. Between October and November, total input prices fell by 1.1%, compared with a record increase of 4.5% the previous month.

Core input prices, which exclude purchases from the food, beverage, tobacco and petroleum industries, were up 11.5% compared with a rise of 10.3% in the year to October 2016.

Mike Prestwood, ONS head of inflation, commented: “November’s slight rally in the value of sterling eased the inflationary pressure on businesses importing raw materials, but consumer prices continued to edge upwards, due mainly to the rising cost of clothing and fuel.”