Egypt inflation rise deepens challenge for cabinet

Inflation in Egypt's faltering economy accelerated in November, putting pressure on the new government to help millions of poor whose living costs were pushed up by supply chain failures even as incomes have been stagnating.

Urban consumer prices climbed 9.1 percent in the 12 months to November, up from 7.1 percent in October, the state statistics agency said. Core inflation, which excludes volatile items, slowed from a year earlier but grew on a monthly basis.

"Rising inflation in such a weak growth environment is a concern," said HSBC Middle East economist Liz Martins.

Egypt's economy is likely to have grown 0.5 percent in the third calendar quarter, but the situation has worsened since then, Capital Economics said in its latest research note.

"Interest rates have been hiked to support the currency, while the combination of protests and strikes are likely to have disrupted business," it said. "As a result, we would not be surprised if fourth-quarter GDP data are much weaker."

The relentless price growth makes grim reading for a new army-backed government sworn in last week.