Rising inflation will make Rachel Reeves’s job harder

It was already unlikely the Bank of England (BoE) was going to cut interest rates this week. Having pledged a slow and steady approach to rate cuts, the decision to cut the base rate by 0.25 per cent last month made it much more likely that the Bank would hold rates at their meeting in December.

But any small hope that the BoE would push forward with another small cut has been reduced even further this morning, as the Office for National Statistics reveals that inflation rose by 2.6 per cent in the year to November. While markets were expecting this outcome, the rise is higher than what Threadneedle Street was expecting, with their last round of forecasts suggesting a rise of 2.4