74364
The expected increase in the squeeze on living standards comes as the weak pound pushes up the cost of imported  fuel, food and raw materials.
The expected increase in the squeeze on living standards comes as the weak pound pushes up the cost of imported  fuel, food and raw materials.

UK Inflation to Hit 5-Year High

The UK ranks top for inflation among the G7, while the rise in prices was also above the averages for the eurozone, the wider European Union and the G20 nations

UK Inflation to Hit 5-Year High

All eyes will turn Tuesday to Britain’s consumer price index figure, with this being the final reading before the Bank of England’s next interest rate decision.
The pound exchange rate is liable to become increasingly volatile on the release of the UK’s inflation figures, with the headline reading (year-on-year, September) forecast to print at 3.1% (up from previous 2.9%), its highest level since 2012, news outlets reported.
The month-on-month figure, however, is forecast to drop from 0.6% in August to 0.3% in September, with the core inflation reading forecast to remain steady at 2.7%.
UK inflation is expected to hit a five-year high, outstripping growth in pay packets and putting renewed pressure on the BoE to raise interest rates.
The Office for National Statistics will release its figures on Tuesday, just before an influential committee of MPs is set to question the Bank’s governor, Mark Carney, and other officials involved in setting interest rates.
The expected increase in the squeeze on living standards comes as the weak pound pushes up the cost of imported fuel, food and raw materials. Sterling slumped following the Brexit referendum in June 2016, and is still worth 14% less against the euro and 10% less against the US dollar than before the vote.
The first interest rate hike in a decade could come as early as next month, which could help to keep inflation in check and strengthen the pound. That might help households’ purchasing power, but their borrowing costs would also rise.

Inflation Tops in G7
UK has the highest inflation rate among the world’s top economies, in the latest sign the Brexit vote is contributing to a squeeze on living standards.
The increased cost of importing food and fuel is pushing prices to rise at a faster rate than anywhere in the G7 group of leading global economies, according to the Organization for Economic Cooperation and Development.
The UK ranked top for inflation among the G7, whose other members are the US, Canada, France, Germany, Italy and Japan. The rise in prices was also above the averages for the eurozone, the wider European Union and the G20 nations.

Levy on Firms
September’s inflation figures are also important because they are used to set the taxes companies pay in the form of business rates. The levy on firms’ premises is set on last month’s retail prices index, which is typically higher than the CPI. City economists expect RPI to increase to 4%, up from 3.9% in August.
The government plans to switch the calculation of business rates from the RPI to the CPI from April 2020, saving companies millions of pounds.
Hammond has faced stiff lobbying from firms to bring the change forward, and the Confederation of British Industry will call on Monday for the government to make it part of a package of measures designed to make Britain more attractive for firms as uncertainty about the impact of Brexit grows .
The CBI also wants new plant and machinery investments to be exempted from rates bills. “Short-term actions, such as accelerating business rate reforms, should be coupled with a longer-term vision for tax policy providing the certainty companies crave,” said the group’s director general, Carolyn Fairbairn.
The British Retail Consortium said it expected a 4% increase would add about £250 million ($331.5 million) to retailers’ business rates bills next year. Helen Dickinson, the body’s chief executive, said Hammond should scrap the increase for next year in his budget next month.

Half Trillion Pounds Poorer
Almost half a trillion pounds has been wiped off the nation's wealth after the statistics watchdog reviewed accounts for the past 30 years, it emerged Monday, Daily Mail online reported.
The Office for National Statistics said Britain's stock of wealth was not in £469 billion of surplus as previously thought but a deficit of £22 billion.
The extraordinary write down of £490 billion was greeted with horror by some city analysts Monday warning it could cause a new slump in the pound. They said a slump in foreign companies in Britain would make the situation worse.  
No 10 Downing Street played down the revelations, pointing out the data was quietly revealed a fortnight ago with little negative response in the markets.
The ONS said the write down had no impact on its measurement of the size of the economy since 1997.  

 

Short URL : https://goo.gl/4p7R2E
  1. https://goo.gl/w8VDG1
  • https://goo.gl/tbAs4i
  • https://goo.gl/ushouV
  • https://goo.gl/84oS6e
  • https://goo.gl/Eu4CK5

You can also read ...

India Hits Back at US With Tariffs
Responding to the US import tariffs on certain steel and...
American farmers are losing sales as trading partners hit back with duties of their own.
Only a few months ago, the global economy appeared to be...
Few Will Want to Invest in High-Risk North Korea
US President Donald Trump dangled the carrot of foreign...
Refugees now comprise about 20% of Jordan’s population.
Saudi Arabia, the United Arab Emirates and Kuwait pledged $2.5...
Ministers Fired After Argentina Currency Collapse
Argentina’s President Mauricio Macri has replaced two cabinet...
Businesses in Gaza are cutting back production as a result of falling consumer demand, the prevailing financial sanctions, restricted access to goods and materials, and lack of freedom of movement.
Humanitarian, socioeconomic, political and security conditions...
Greece Creditors Debate Extensions on Bailout Loans
Greek bailout talks are reaching the final stretch and...
Eurozone Reform Agreement
Paris and Berlin are very close to an agreement on eurozone...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus