Rising Inflation in the UK: What to Expect from the Bank of England
In November 2024, the UK’s inflation rate increased to 2.6%, up from 2.3% in October, marking the highest level since March. This rise is primarily attributed to higher fuel prices and increased taxes on tobacco products.
This uptick in inflation has intensified expectations that the Bank of England will maintain its base interest rate at 4.75% during its upcoming meeting.
Economists suggest that the central bank may adopt a cautious approach, considering the persistent inflationary pressures and the recent acceleration in wage growth.
The government’s target inflation rate remains at 2%. However, the current rate continues to erode purchasing power, affecting household budgets and savings.
Economists warn that the situation could worsen, with inflation potentially exceeding 3% by mid-2025, driven by anticipated tax increases and elevated energy costs.
In response to these developments, savers are advised to review their financial strategies to mitigate the impact of inflation on their savings.
Additionally, businesses and consumers are encouraged to monitor economic indicators closely, as sustained high inflation can complicate financial planning and economic stability.