Some comments on the recent official UK inflation stats;
WEALTH CLUB
Isaac Stell, Investment Manager at Wealth Club said:
“Headline inflation continued its reacceleration in November to the highest rate since March 2024. This second consecutive monthly reacceleration can largely be attributed to rising transport costs, housing, and household service costs. Services inflation, a key gauge for the Bank of England came in a touch below expectations at 5%.
The strength of the latest inflation figures, coupled with Tuesday’s higher than expected wage growth data may well put to bed the possibility of a pre-Christmas rate cut from the BoE on Thursday. Although the public may feel Andrew Bailey and co are channelling their inner Scrooge, prudence on the BoE’s part seems sensible as no one wants to see the inflationary ghosts of Christmas past return.
This latest inflationary spike adds to the New Year challenges facing the BoE. With businesses shouldering the Chancellors national insurance rises, the indication of prices hikes from companies have been coming thick and fast. There may be cuts to jobs and less generous pay rises to boot. Those hoping to see a continuous stream of rate cuts in 2025 will likely be disappointed.”
MY PENSION EXPERT
Lily Megson, Policy Director at My Pension Expert said, “This second consecutive rise in inflation will hardly fuel festive cheer. For many, it will set the scene for yet more uncertainty as we head into the new year.
“It has undoubtedly been a challenging transition into power for the Labour government, with its economic strategy coming under fire. While there were high hopes for renewed focus and fresh solutions, Rachel Reeve’s decision to delay the second phase of the pensions review, paired with today’s worrisome inflation news, risks stalling any forward momentum on tackling the UK’s pensions crisis.
“Now, the government must take meaningful action to prioritise Britons’ long-term financial security. Not only does this mean taking decisive action to deliver economic stability but also equipping savers with the tools and resources they need to feel assured that their futures are on solid ground. Rising living costs cannot be allowed to yet again derail people’s aspirations for a secure and comfortable retirement.”
CHETWOOD BANK
Paul Noble, CEO of Chetwood Bank, said: “This latest rise in inflation is a financial gut punch for Britons preparing for the year’s most expensive season.
“It comes as no surprise following the uncertainty surrounding October’s budget announcement and could be a sign of a prolonged period of inflation above the government’s target. All eyes will now be on the Bank of England’s interest rate announcement on Thursday to see how they react to this news.”
“With inflationary pressure still unrelenting, consumers must be more proactive than ever about managing their money – missing out on competitive rates and leaving funds in old savings accounts, or their current account, is just leaving money on the table. Financial institutions must play their part by providing products and support that can help Britons navigate yet another tricky economic period.”
TOPMONEY COMPARE
Editor-in-chief of TopMoneyCompare, Russell Gous said: “The rise in inflation to 2.6% will add fresh concerns for consumers and businesses, especially as core inflation also climbed to 3.5% from 3.3% in October. This raises questions about how quickly inflation can be brought under control.
For sterling, this inflation uptick adds upward pressure as markets anticipate the Bank of England may need to hold interest rates longer than previously thought. All eyes will now turn to the BoE’s decision on Thursday, with policymakers under renewed pressure to take a firmer stance to combat inflation.
Earlier this year, a final rate cut was expected before 2025, but that now seems unlikely—especially after the recent surprise rise in pay growth. We may even have to wait until spring before rates start to fall again.
For those making international money transfers, this inflation data will likely trigger short-term volatility in exchange rates as markets adjust. Staying on top of rate movements and comparing providers will be crucial in navigating the uncertainty and managing costs effectively.”
Managing Director of Aurora Capital, George Holmes, said: “Confirmation that headline inflation rose to 2.6% in November will be concerning for UK small businesses, particularly those reliant on borrowing or seeking new funding.
After months of falling inflation, this second consecutive increase highlights the ongoing cost pressures businesses face, from higher supplier prices to rising wage demands. For many SMEs, already operating on slim margins, this adds yet another hurdle to maintaining stability and growth.
This news will be especially tough for businesses with variable-rate loans. Hopes of an imminent base rate cut to ease borrowing costs now look increasingly unlikely, with the Bank of England likely to maintain its cautious stance to keep inflation in check. This leaves SMEs dealing with elevated interest rates for longer, adding strain to cash flow and making essential funding more expensive.
Small businesses are resilient, but access to affordable, flexible finance will be critical in navigating this environment. Without support, rising inflation and stubbornly high borrowing costs risk stifling growth and forcing businesses to put off investment plans they need to stay competitive.”
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