The Office for National Statistics has released data showing that Consumer Price Index (CPI) inflation has increased to 5.1% in the 12 months leading up to November 2021.
The UK’s target for CPI inflation is 2%, set by the government. The increase has been mainly attributed to increased prices of fuel, clothing and footwear.
The CPI inflation value for October was 4.2%, with the jump in November exceeding economists’ predictions.
The increase to CPI inflation exceeds the 4.3% increase in the median weekly pay reported by the ONS in April, meaning that most UK employees now face a decrease in real wages.
General Secretary for Unite the Union, Sharon Graham, said:
“Today’s figures mean our members must fight for wage rises above the current rate of inflation, as measured by the RPI. Otherwise they will be facing a calamitous drop in their standard of living.”
The data also showed an increase in the Retail Price Index (RPI) measure of inflation of 7.1%, its highest level in more than 30 years. Student loans taken out from 2012 onwards have an interest rate of RPI+3.
Grant Fritzner, chief economist of the Office for National Statistics, said:
“A wide range of price rises contributed to another steep rise in inflation. … 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.”
The Bank of England will announce whether it will increase interest rates on Thursday, although it is currently expected that it will not, amid concerns of uncertainty due to the spread of the Omicron COVID variant.
