The net percentage of UK consumers expecting prices to rise at a faster pace over the next year is at its highest level since July 2008, according to the November EU Commission consumer survey – see chart.

The net percentage reporting an increase in prices over the last 12 months also rose further and is well above its long-run average.

The forward-looking indicator usually leads swings in inflation and the latest rise is consistent with the forecast here of a pick-up in the headline CPI rate to 4% or more in early 2011, a prospect also mooted by MPC member Andrew Sentance in an article yesterday.