Inflation in Russia nears six-year peak ahead of cenbank meeting

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FILE PHOTO: A view shows Russian rouble coins in this illustration picture

MOSCOW – Russia’s annual inflation accelerated to a near six-year peak of 8.38% in late November, weeks ahead of a central bank meeting where it is expected to raise rates to rein in stubbornly rising consumer prices, economy ministry data showed on Wednesday.

Inflation sped up to 0.46% in the week to Nov. 29, its highest since early July, from 0.20% in the previous week, Rosstat data showed, putting pressure on the Bank of Russia to opt for a sharper hike in the cost of lending.

The weekly increase in consumer prices was driven by higher food prices as well as by a sharp increase in prices for New Year tours to Turkey, according to Rosstat.

President Vladimir Putin said on Tuesday inflation was a serious problem, especially for people with low incomes, calling for pre-emptive measures.

Central bank chief Elvira Nabiullina said this week the key interest rate could be raised from 7.5% by up to 100 points at its Dec. 17 board meeting, given that inflation stays near the upper boundary of its forecast range.

Russia has increased the key rate six times this year from a record low of 4.25%, but annual inflation still spiked above 8%, hovering far above the 4% target.

(Reporting by Andrey Ostroukh and Darya Korsunskaya; Editing by Lisa Shumaker)