57682
Rising air fares and food prices helped push up  the rate of inflation.
Rising air fares and food prices helped push up  the rate of inflation.

UK Inflation Surges Faster Than Expected

UK Inflation Surges Faster Than Expected

Rising air fares and food prices helped to push up UK inflation to its highest rate since July 2014 in December. Consumer price index inflation rose to 1.6% last month, up from 1.2% in November, the Office for National Statistics said. And higher costs for imported materials and fuels pushed up producer prices.
ONS head of inflation Mike Prestwood said: “This is the highest CPI has been for over two years, though the annual rate remains below the Bank of England’s target and low by historical standards, BBC reported.
“Rising air fares and food prices, along with petrol prices falling less than last December, all helped to push up the rate of inflation.
“Rising raw material costs also continued to push up the prices of goods leaving factories.”
Prior to the Brexit vote, inflation stayed between -0.1% and 0.1% for 10 months due to a collapse in oil prices and a supermarket price war that led to slashed prices, Business Insider reported.
Prices started to pick up following the Bank of England’s decision to cut interest rates in the aftermath of the UK’s vote to leave the European Union, and the fall in the value of the pound.
Expectations remain that inflation will jump sharply in the coming months as the effects of the weaker pound—which has fallen roughly 19% since the Brexit vote—trickle into the real economy, pushing up the price of goods.
As a result, the Bank of England has said that it is willing to tolerate an overshoot in inflation beyond its 2% target over the coming months in order to protect jobs.
Inflation will more than double to overshoot the Bank of England’s 2% inflation target in 2018, driven up by a falling currency, the central bank said in its quarterly Inflation Report in November.
“In the central projection, inflation rises from its current level of 1% to around 2.75% in 2018, before falling back gradually over 2019 to reach 2.5% in three years’ time,” the Bank said.
That assertion was reiterated by the bank’s Governor Mark Carney on Monday evening as he delivered a major speech discussing the relationship between inflation and output in the British economy.

Short URL : https://goo.gl/D0ZeO4
  1. https://goo.gl/KHmkrM
  • https://goo.gl/sTBQRu
  • https://goo.gl/Dof5IY
  • https://goo.gl/Ta8D9O
  • https://goo.gl/Y24FTs

You can also read ...

Thai CB Retains Key Rate
Thailand’s central bank on Wednesday left its key interest...
China and India continue to remain the most promising investment destinations in 2017.
Developing Asia is expected to witness a 15% increase in...
Brazil Raises Deficit Ceiling
Brazil is raising its deficit ceiling for this year and 2018...
Elon Musk, Kevin Plank, Bob Iger, Richard Trumka, Kenneth Carleton Frazier
The honeymoon is definitely over. When US President Donald...
Riksbank is under pressure to tighten its ultra-loose monetary policy.
Underlying inflation topped the Swedish central bank’s target...
Crude oil accounts for 96% of exports and around half of state revenue.
Venezuela might look bad right now amid protests, scarce food...
At 310% GDP, China’s banking sector is above the advanced economy average and nearly three times  the emerging market average.
China's economy is looking good enough that the International...
US Household Debt at $12.8 Trillion
US household debt reached a new record in the second quarter,...

Add new comment

Read our comment policy before posting your viewpoints

Image CAPTCHA
Enter the characters shown in the image.

Trending

Googleplus