Inflation sticks at 2.7 per cent in November

Economy and Policy December 18, 2012 by Emma Gunn

Inflation in the UK remained unchanged during November, sticking at a six-month high of 2.7 per cent despite expectations that it would dip to 2.6 per cent.

The Retail Prices Index (RPI)  – which includes housing costs – also stood unchanged at 3 per cent.

The causes for the high rate of inflation shifted between October and November, according to the Office for National Statistics.

The rising cost of food, particularly bread and potatoes, non-alcoholic beverages and gas and electricity were the main upward force on inflation in November. In October inflation was largely the result of the rise in university tuition fees, followed by food and housing costs.

Kevin Mountford, head of banking at moneysupermarket.com, says: 'Today’s news is a further blow to savers and struggling UK households, and is a bitter pill to swallow for those planning to make savings goals a big part of their New Year resolutions for 2013.

'It is important savers don’t give up or get put off, and prepare to switch if they are not currently on the most competitive deal. There is a significant difference between the average and top-paying rates, and moving to a better deal can go a long way to help savers limit the impact of inflation on their pots.'

According to Moneyfacts, to beat inflation, a basic-rate taxpayer at 20 per cent needs to find a savings account paying 3.37 per cent a year, while a higher-rate taxpayer at 40 per cent needs to find an account paying at least 4.5 per cent.
 
There are currently just six accounts that savers can choose from (all Isas) that will beat inflation. 
 
The Consumer Prices Index (CPI) measure of inflation first hit 2.7 per cent in October, its highest level since May when it stood at 2.2 per cent.

This article was written for our sister website www.moneywise.co.uk

Subscribe to Money Observer Magazine

Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.

Subscribe now

Add new comment