BoE governor Andrew Bailey. Image courtesy of the Bank of England Flickr account.

Inflation in the United Kingdom has hit 5.1% according to the latest Office for National Statistics (ONS) data released today. This puts inflation at a ten-year high, and confirmed the fears of economists and business owners that inflation was growing quicker than forecast.

The pound sterling is currently trading at approximately $1.32535 USD, having peaked at $1.32815 around 8am this morning. This is fairly positive for the past 24 hours, and in line with the previous seven days, but is down vs the dollar (and euro) for the past month and the year as a whole.

Inflation last month was 4.2%, and the forecast by the Bank of England for November was for a rise of half a percentage point, bringing inflation up to 4.7%. The concern now for the BoE is that inflation was forecast to hit 5% in the late spring, and that inflation measures lag – potentially meaning even greater inflation levels in the New Year.

The BoE is currently meeting for the final time this year, with a press conference tomorrow following the conclusion of talks. With a 2% inflation target, many are waiting to see just how the Bank's Monetary Policy Committee members intend to reign inflation back in. Quantitative easing has been left to continue the final round of money printing for December, despite opposition, but with the conclusion of that the economy is ready for interest rate rises.

The ONS report, along with media testimony from business owners and consumers, points to the cost of transport, fuel, and energy as the big driving factors, but additional inflation for clothing and other services.

America is sharing the same woes at present, with global supply chain issues and pay disparity leading to a perfect storm of increasing prices and worker shortages. Inflation stateside is much higher at 6.8%, and with the Federal Reserve meeting today the US central bank could potentially conclude its bond-buying programme this week and transition to interest rate rises in February if necessary.