Inflation rose to 3.1% in November, the highest in nearly six years, as the squeeze on households continued, according to the Office for National Statistics (ONS). The most recent data shows that average weekly wages are growing at just 2.2% however.
Mark Carney, the governor of the Bank of England, will now have to write a letter to Chancellor Philip Hammond explaining how the Bank intends to bring inflation back to its 2% target. Carney has to write a letter to the chancellor if the Consumer Prices Index (CPI) inflation rate is above 3% or below 1%.
In November, the BoE raised its key interest rate for the first time in more than a decade from 0.25% to 0.5%. However, it is not expected to announce a further increase when it publishes the results of the Monetary Policy Committee's two-day meeting on Thursday 14th of December. Carney had said that he expected inflation to peak in October or November.