LONDON (Reuters) -British inflation rose to its highest in eight months in November but an underlying measure of price growth watched closely by the Bank of England held steady, offering the central bank a little bit of relief.
Consumer prices rose by an annual 2.6% in November, up from an increase of 2.3% in October and moving further away from September's 1.7% rise - the first time in almost three and a half years that inflation fell below the BoE's 2% target.
The inflation rate was the highest since March and in line with economists' expectations in a Reuters poll.
The increase in the rate was broad-based but most prominent for transport - particularly petrol and car purchase costs - and was only partly offset by smaller rises in air fares and the cost of eating out.
"Another consecutive monthly rise in inflation, reaching its highest level since March, underscores the persistent price pressures within the UK economy," Martin Sartorius, principal economist at the Confederation of British Industry, said.
The BoE is worried about persistently strong wage growth while the new government's tax increase for employers is expected to filter through into higher prices after it is introduced in April.
Some economists have predicted headline consumer price inflation is likely to hit 3% in 2025.
The BoE - which is expected to keep interest rates on hold on Thursday after its December meeting - predicted consumer price inflation in November would be 2.4% when it published a set of projections six weeks ago.