LONDON (Reuters) – British inflation rose to its highest in eight months in November but the Bank of England’s closely watched underlying measure of price growth remained steady, giving the central bank a little relief.

Consumer prices rose an annualized 2.6% in November, down from an increase of 2.3% in October and moving away from a 1.7% increase in September – the first time in nearly three and a half years that inflation fell below the BoE’s 2% target.

The inflation rate was the highest since March and in line with the expectations of economists in a Reuters poll.

The rate increase is broad-based but most notable for transportation – particularly fuel and car purchase costs – and is partly offset by smaller increases in air fares and food costs in outside.

“Another consecutive monthly rise in inflation, which reached its highest level since March, underscores continued price pressures within the UK economy,” said Martin Sartorius, chief economist at Confederation of British Industry.

The BoE is concerned about continued strong wage growth as the new government’s tax hike for employers is expected to filter through to higher prices after being introduced in April.

Some economists predict headline consumer price inflation is likely to hit 3% by 2025.

The BoE – which is expected to keep interest rates unchanged on Thursday after its December meeting – predicted November consumer price inflation to be 2.4% when it published a set of projections six weeks ago.

Inflation in services – which the BoE views as a key measure of price pressure generated within the country – was held at 5.0% in November unchanged from October, the Office for National Statistics said.

Economists polled by Reuters generally expected a slight increase in service price inflation to 5.1%. The BoE expects it to drop to 4.9% in November.

The BoE has said it will only move gradually with cuts in interest rates despite signs that the British economy is losing momentum.

Sterling briefly fell against the dollar after the data was published.

The ONS said its measure of core inflation, which excludes energy, food, alcohol and tobacco, rose to 3.5% in November from 3.3% in October.