Increase extinguishes expectations of interest rate cut this week and underlines tough challenges policymakers face

• UK inflation hits eight-month high of 2.6%
• Business live – latest updates

Keir Starmer’s latest “milestone” for the economy is growth that can be “felt in people’s pockets”. News that inflation hit 2.6% in November, and is heading in the wrong direction, underlined just how far there is to go.

The latest inflation data extinguished any lingering expectations of a rate cut this week – and there were some worrying signs in the detail for policymakers that could result in borrowing costs being on hold for some time to come.