British inflation accelerated in November to its highest rate since comparable records began a decade ago, boosting expectations the Bank of England (BoE) will hike interest rates again early next year.

Official data released yesterday showed consumer price inflation jumped a third of a point to 2.7 percent, marking the seventh month it has exceeded the Central bank?s 2 percent target and the highest since the current series began in January 1997.

Sterling leapt a third of a U.S. cent and futures markets quickly moved to price in a greater chance of borrowing costs hitting 5.25 percent in the next few months.

?Today?s release will give hawks on the Monetary Policy Committee more ammunition to argue the case for a further rate hike next year, perhaps at the February inflation meeting,? said Rob Carnell, strategist at ING.

But other economists pointed out the BoE had already factored in the latest jump in prices when it raised interest rates in August and then again in November and inflation is forecast to fall next year.

Still, policymakers will remain on alert that retail price inflation ? the basis for most wage settlements ? hit 3.9 percent, its highest in eight years, just ahead of the New Year pay round.

?Today?s number is still broadly in line with the Bank of England?s most recent forecast. Nevertheless, it will be concerned over the implications for the upcoming pay round,? said David Page, economist at Investec.

BoE policymaker Paul Tucker said yesterday that keeping wage demands in check was a key reason for hiking rates last month but gave little sign that he was gunning for another rise anytime soon.

Soaring global energy prices in the summer accounted for much of the higher inflation this year and while petrol prices have since fallen back, they did so less last month then in November 2005.

That, combined with air fares also dropping less steeply than last year, added nearly 0.2 percentage points to the inflation rate in November.

Previously announced rises in utility bills also had an upward impact. Electricity, gas and other fuels cost 30 percent more last month than in November last year, the highest rate of inflation for the sector since since the series began in 1997.

Analysts were surprised that there were no offsetting effects from clothing and footwear stores given widespread reports of retailers slashing prices after a lacklustre start to the crucial Christmas shopping season.

Most analysts still believe interest rates will remain on hold at their 5-year high of 5.0 percent for now, but much will depend on whether wages do indeed pick up in the new year as workers demand compensation for the higher cost of living.

?We continue to believe the pay rounds in the New Year will be relatively subdued, inflation will fall back below target once the energy contribution fades, and the next move for the BoE is more likely to be down than up,? said Karen Ward, economist at HSBC.