UK inflation jumps – house price growth eases
The UK Consumer Price Index has risen to its highest level since October 2014 while house price inflation has continued to decrease, according to figures from the ONS.
Howard Archer, chief UK and European economist at IHS Global Insight, said November's rise in the index showed that the lower-than-expected rate in October only represented a "brief respite". He added, "It looks inevitable that consumer purchasing power will deteriorate markedly over the coming months as inflation moves appreciably higher and earnings growth is limited."Companies will highly likely look to clamp down on workers' pay as they strive to save costs in a more difficult environment and as their imported input prices are lifted by the sharply weakened pound."Meanwhile, a likely softening labour market and consumer uncertainties will dilute workers' ability and willingness to push for higher pay awards despite rising inflation."The Trades Union Congress described the latest rise in inflation as illustrative of the threat to living standards as working families faced up to the realities of more than a decade of below-inflation pay rises.However, a spokesman for HM Treasury said, "The economy remains fundamentally strong with taxes cut for millions of working people and the employment rate at a record high. The Autumn Statement set out support for an economy that works for everyone, as we adjust to our new relationship with the EU."Meanwhile, figures from the ONS on property values showed that house price inflation across the UK continued to ease, with the annual rate decreasing from seven per cent in September to 6.9 per cent in October.It meant that the average price remained at £217,000, although there were marked regional variations with the biggest increases being recorded in the London commuter belt – both Basildon and Slough saw annual rises in excess of 19 per cent – while falls of 8.8 per cent were recorded in the City of London, 8.7 per cent in Aberdeen and 4.9 per cent in Kensington and Chelsea.
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