"Consumers' spending power is being tightly squeezed in the run-up to Christmas"
- Samuel Tombs, an economist at Capital Economics Ltd.
The annual rate of inflation in the U.K. remained unchanged in November, as higher electricity and gas costs kept growth of consumer prices above the Bank of England's target. According to the Office for National Statistics, nation's annual consumer price inflation remained at 2.7% last month, after a surprise jump in October, while remaining at its highest level since May. Last month, the BoE said it is widely expected that it would take until the third quarter of 2014 before consumer prices fell below the bank's 2% target, nine months later than predicted in August. In the meantime, the goods' inflation rate remained at 1.5% in November, while the services' rate climbed to 4.2%, up from 4.1% in the prior month.
"Consumers' spending power is being tightly squeezed in the run-up to Christmas," said Samuel Tombs, an economist at Capital Economics Ltd. in London. "Looking ahead, inflation looks set to hover between 2.5 and 3 percent for the best part of the next year as further increases in utility and food prices kick in."
"UK inflation paused for breath in November before it resumes its assault on the 3% mark over the next few months," said Rob Wood, economist at Berenberg Bank.
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