Transport costs drive UK inflation to 10-year highon December 15, 2021 at 7:43 am

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Rising transport and energy costs push inflation to 5.1% in the 12 months to November

Petrol pump

Image source, Getty Images

The cost of living surged by 5.1% in the 12 months to November, up from 4.2% the month before, and its highest level since September 2011.

Rising transport and energy costs drove the rise, which was above forecasts of a 4.7% increase, the Office for National Statistics (ONS) said.

Grant Fitzner, ONS chief economist, said rising fuel prices and second hand cars were big factors.

And the cost of raw materials also rose significantly, he added.

Figures showed petrol prices jumped to the highest ever recorded – 145.8p a litre last month – while the cost of used cars also raced higher due to shortages of new vehicles as supply chain issues continue to hit the economy.

The jump in inflation, twice the Bank of England’s 2% target rate, will intensify debate over whether interest rates should rise.

On Tuesday, the International Monetary Fund predicted inflation would reach around 5.5% early next year – its highest in 30 years – and warned the Bank not to succumb to “inaction bias”.

Chancellor Rishi Sunak said on Wednesday he understood the impact being felt by consumers.

“We know how challenging rising inflation can be for families and households which is why we’re spending £4.2bn to support living standards and provide targeted measures for the most vulnerable over the winter months,” Mr Sunak said.

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