World Economy

Britons Worry More About Inflation

Britons Worry More About InflationBritons Worry More About Inflation

Worries about inflation among British households have risen to their highest level in nearly two and a half years following the fall in the value of the pound since the Brexit vote in June, a survey showed on Wednesday.

Financial data firm Markit also said more than half households now expect the Bank of England to raise interest rates in the next 12 months, Reuters reported.

Markit said its monthly Household Finance Index held steady at 43.7 in November, its lowest level since May.

British consumer price inflation slowed in October, according to data released on Tuesday, but is expected to pick up to around 3% by the end of next year, according to the Bank of England and private economists.

Many Britons will have already noticed higher prices at the fuel pump. BoE Governor Mark Carney has said the weaker pound—down about 20% against the dollar since June—will soon start to feed through into prices across the high street.

Households were divided on monetary policy, with 17% of them expecting the BoE to cut its base rate again, compared with 55% who said it was likely to raise rates within the next 12 months.

The BoE said earlier this month it no longer expected to cut rates below their historic low of 0.25% as the economy held up to shock of the Brexit vote better than it had predicted and inflation pressures mounted.

 Gov’t Fails

The government’s “shambolic” approach to Brexit is failing to equip the UK economy for leaving the EU, shadow chancellor John McDonnell said.

McDonnell accused Chancellor Philip Hammond of being isolated from cabinet colleagues and said he was too “weak” to make Brexit a success.

He also said Labor would not vote to block Brexit or push for a second referendum.

Treasury minister David Gauke said Labor had “zero” economic credibility.

In a speech in central London, McDonnell accused ministers of plotting a “closed-minded Brexit” that “works only for bankers and the rich, instead of one that’s based on fairness and works for the rest of us”.

Setting out Labor’s position ahead of the Autumn Statement—to be made next Wednesday—he said the government’s approach will “continue to undermine the ambitions of working people”, he said.

McDonnell said: “We need a credible fiscal framework that supports Brexit; we need actual support for those in work on low and middle incomes; and we need secure and properly funded public services.


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