Railway staff are currently staging their second day of a two-day national strike
London (AFP) - British inflation slowed in November but sat near the highest level in more than 40 years, data showed Wednesday, as a cost-of-living crisis sparks fresh strikes.
The Consumer Prices Index eased somewhat to 10.7 percent last month, the Office for National Statistics (ONS) said in a statement, against expectations of 10.9 percent.
That marked a modest improvement from October’s 11.1 percent, the highest level since 1981, but pressures remain high due to soaring domestic energy and food bills after Russia’s war on Ukraine.
The news comes amid crippling industrial action by public and private sector workers demanding higher wages, which have been dramatically eroded by rising living costs this year.
Railway staff are currently staging their second day of a two-day national strike, kicking off a month of walkouts involving professions from nurses to passport control and postal workers that spells Christmas misery for millions.
November’s inflation data was also published on the eve of an interest rate decision from the Bank of England, which is widely expected to deliver the ninth hike in a row as policymakers try to tackle rampant prices.
- Historically high -
“Although still at historically high levels, annual inflation eased slightly in November,” noted ONS chief economist Grant Fitzner.
“Prices are still rising, but by less than this time last year, with the most notable example of this being motor fuels.”
British finance minister Jeremy Hunt blames Russian President Vladimir Putin’s war in Ukraine for fuelling sky-high energy prices, as well as the economic reopening from Covid restrictions.
“The aftershocks of Covid-19 and Putin’s weaponisation of gas mean high inflation is plaguing economies across Europe, and I know families and businesses are struggling here in the UK,” Hunt said.
“Getting inflation down so people’s wages go further is my top priority.”
Public and private sector workers have gone on strike this year demanding higher wages
“I know it is tough for many right now, but it is vital that we take the tough decisions needed to tackle inflation – the number one enemy that makes everyone poorer.”
Prime Minister Rishi Sunak’s Conservative government insists that inflation-busting pay hikes would further worsen the situation.
Nurses are set to walk out for the first time in their union’s 106-year history on Thursday.
Economists meanwhile expect the BoE will lift its key lending rate from 3.0 percent to 3.5 percent on Thursday, further squeezing Britons’ disposable incomes with rising loan costs.
Inflation is still running at more than five times the BoE’s official target level of just two percent.
- Inflation past peak? -
Britain remains on course for a long-lasting recession on fallout from the highest inflation in decades, despite this week’s news of economic growth in October.
The government and BoE have each said they believe Britain is already in a recession that the bank expects to last all next year.
Wednesday’s data nevertheless stoked hope that inflation may have peaked in October, but analysts warn more hefty interest rate hikes could further darken the outlook.
“Inflation may be past the peak but given that prices for UK consumers have scaled a mountain, there is still a vertiginous descent to navigate before it’s back down to less dangerous levels,” said Susannah Streeter, senior investment and markets analyst at stockbroker Hargreaves Lansdown.
Yet the ONS was quick to dampen talk of a peak.
“Some may be calling this a peak. It is, I think, too early. We’ve only seen one fall from a 40-year high, so let’s wait a few months,” Fitzner told BBC radio.