The rate of consumer inflation rose to 3.3 per cent in November, according to new figures from the Office for National Statistics.
The Consumer Prices Index (CPI) was buoyed by a record increase in the cost of food, clothing and furniture during the month, leading to a rise of 0.1 per cent from October.
There was an even larger increase in the Retail Prices Index (RPI), which rose to 4.7 per cent from 4.5 per cent in the previous month. RPI takes into account a wider range of housing costs, including mortgage interest payments.
Consumer inflation is significantly above the Bank of England’s target rate of 2 per cent.
Food prices have risen particularly sharply over the last year, and seem to be picking up speed. Food and non-alcoholic drinks increased by 1.6 per cent according to the latest figures.
Many analysts predict that price rises will increase at an even faster rate following the New Year VAT rise. A report from accountants KPMG suggests that some six in 10 retailers plan to use the increase as an opportunity to push prices up further.
The rising cost of commodities like wheat looks set to continue to push food prices up during 2011.
