Inflation rises to 3.3%

Inflation is still above the Bank of England target. The Bank of England inflation target is more than a percentage point above the 2% goal. UK inflation rose by 0.01% between October and November to 3.3% under the Consumer Prices Index (CPI) following record price increases for clothing, furniture and food. The rate is well above the government's 2% target. The Retail Prices Index (RPI), which includes mortgage payments, rose to 4.7% from October's figure of 4.5%. Member of the Bank of England's Monetary Policy Committee Andrew Sentance warned that the CPI could increase to 4% next year as a result of the January VAT rise from 17.5% to 20%. He added that interest rates would need to rise correspondingly.