• News
  • Sport
  • TV
  • Radio
  • Education
  • TV Licences
  • Contact Us
  • SOUTH AFRICA
  • POLITICS
  • BUSINESS
  • SPORT
  • AFRICA
  • WORLD
  • FEATURES
  • OPINION
No Result
View All Result
1
Home Business

UK inflation hits near 30-year high, pressuring BoE and households

19 January 2022, 1:36 PM  |
Reuters Reuters |  @SABCNews

Image: Reuters

Inflation in Britain rose faster than expected to a near 30-year high in December, intensifying a squeeze on living standards and putting pressure on the Bank of England to raise interest rates again.

The annual rate of consumer price inflation increased to 5.4% from November’s 5.1%, the highest since March 1992, the Office for National Statistics said. Economists polled by Reuters had expected a rise to 5.2%.

Financial markets now price in a more than 90% chance that the BoE will raise its main interest rate to 0.5% on February 3. Last month it became the world’s first major central bank to tighten policy since the start of the COVID-19 pandemic.

“The Bank of England was already feeling uncomfortable about its monetary policy stance. Today’s upside surprises to both the headline and core inflation readings will certainly not have helped,” said Ambrose Crofton, global market strategist at J.P. Morgan Asset Management.

Two-year British government bond yields, which are sensitive to financial markets’ interest rate expectations, came within a whisker of their highest level since 2011.

Inflation has risen sharply across most advanced economies, reflecting a global rise in energy prices and supply chain difficulties.

But the BoE appears more concerned than the US Federal Reserve or the European Central Bank that labour shortages and wage pressures will cause inflation to be slow to fall back once immediate price pressures have passed.

A surge in cases of the Omicron coronavirus variant had negligible impact on inflation, ONS statisticians said.

Instead, prices for food, hospitality and household goods were the main factors pushing up inflation in December while fuel prices – the main driver in previous months – remained at recent highs.

“Not only does this provide additional evidence that inflation is becoming endemic rather than transitory, it also bodes ill for households facing multiple rises in the cost of living this spring,” said Kitty Ussher, chief economist at the Institute of Directors.

APRIL PEAK?

British inflation is widely expected to peak in April when regulated household energy bills look set to increase by around 50%. Last month the BoE forecast a peak of around 6%, but now some economists see 7% as more likely.

BoE Governor Andrew Bailey is due to speak to a parliament committee at 1415 GMT, and the bank will publish new inflation forecasts on February 3. Its last set in November showed inflation staying above its 2% target until mid-2024.

Rising inflation is also turning into a political problem for Prime Minister Boris Johnson’s government, which faces calls from the opposition and charities to offset the rise in energy bills, which comes at the same time as a tax increase on wages to fund higher health and social care spending.

“I understand the pressures people are facing with the cost of living, and we will continue to listen to people’s concerns,” finance minister Rishi Sunak said after the inflation data.

Wednesday’s figures showed that core CPI – which excludes more volatile food, energy, alcohol and tobacco prices – rose to a record 4.2% from November’s 3.9%.

Retail price inflation – an older measure that the ONS says is no longer accurate, but which is still widely used by government and businesses – rose to a 30-year high of 7.5% from 7.1%.

Factory price inflation showed tentative signs that cost pressures may have peaked, cooling to 9.3% from 9.4% in November. Inflation for costs paid by producers for material and energy also decreased, to 13.5% from 15.2%.

Share article
Previous Post

Limpopo Maseala Progressive High school celebrates 100% pass rate

Next Post

Group D Permutations – Egypt hoping not to suffer same fate as Ghana 

Related Posts

File image: Chicken  pictured at a poultry factory

Western Cape chicken farms on high alert after bird flu outbreak

4 June 2023, 7:24 PM
File image: Auditor-General, Tsakani Maluleke briefs the standing committee on the Auditor-General on the 2021-22 local government audit outcomes on May 31, 2023.

Active citizens will help hold municipalities accountable: Analyst

4 June 2023, 6:01 PM
File image: Stakeholders meeting at Kliptown SAPS to talk about the incident that happened at Maponya Mall in Soweto on Friday.

Transport sector needs proper regulation to help drive economy: Economist

3 June 2023, 6:47 PM
North West province

Four North West municipalities placed under financial rescue

3 June 2023, 10:00 AM
An Eskom power station seen at night.

Higher stages of load shedding don’t suggest a grid collapse: Ramokgopa

2 June 2023, 9:00 PM
New Development Bank head office

New Development Bank making good progress: Pandor

2 June 2023, 4:32 PM
Next Post
Egypt's national soccer team players attend a training session at Cairo stadium during their final training camp, ahead of the African Cup of Nations which is scheduled to take place in Cameroon next week, in Cairo.

Group D Permutations - Egypt hoping not to suffer same fate as Ghana 

Most Viewed

  • 24hrs
  • Week
  • Month
  • Deadline for Zimbabwean Exemption Permits draws near
  • Eastern Cape ActionSA raises eyebrows over qualifications of senior officials
  • Durban’s N2 road, Spaghetti Junction closed due to cleanup operations
  • Limpopo district embroiled in fraudulent travel claims
  • Five primary school children killed in Mitchells Plain crash
  • Dr Nandipha’s looks during court appearances under the spotlight
  • Deadline for Zimbabwean Exemption Permits draws near
  • Reserve Bank expected to increase repo rate on Thursday
  • Zimbabwe receives 18 helicopters from Russian Federation
  • Eastern Cape ActionSA raises eyebrows over qualifications of senior officials
  • Eskom to suspend rolling blackouts on Monday morning
  • Kremlin: Western long-range missiles to Ukraine will fuel ‘spiralling tension’
  • Another Limpopo tavern shooting claims 1 life, 5 others wounded
  • Two suspects arrested in connection with murder of MUT lecturer
  • MUT University expresses shock at the murder of one of its lecturers

LATEST

A member of  Lesotho's military looks on as he stands guard in front of an armed personnel carrier at the entrance of the army barracks in the capital Maseru.
  • Africa

Lesotho’s youth development boot camp aims to tackle crime, ill-discipline


Fugitive pair of Thabo Bester and Dr Nandipha Magudumana
  • Thabo Bester saga
  • South Africa

Judgment expected in Dr Nandipha’s urgent application against her arrest


Reaction Officers and Detectives arrest 2 suspects in connection with the murder of MUT lecturer, Chanlall Dwarika on May 31, 2023.
  • South Africa

MUT University expresses shock at the murder of one of its lecturers


The Demoratic Alliance logo is displayed on a table.
  • Politics

Big names enter the Gauteng DA leadership race: Analyst


Working On Fire's Managing Director, Trevor Abrahams and members of his team.
  • World

200 SA firefighters land in Canada to help put out wildfires


Mayor of Warsaw, Rafal Trzaskowski, leader of the main opposition party Civic Platform (PO) Donald Tusk and former Polish President and Peace Nobel Prize laureate, Lech Walesa take part in the march on the 34th anniversary of the first democratic elections in postwar Poland, in Warsaw, Poland, June 4, 2023.
  • World

Polish opposition supporters, seeking change, mark 1989 Solidarity win


Weather

  • About the SABC
  • Contact Us
  • Jobs
  • Advertise
  • Disclaimer
  • Site Map

SABC © 2023

No Result
View All Result
  • SOUTH AFRICA
  • POLITICS
  • BUSINESS
  • SPORT
  • AFRICA
  • WORLD
  • FEATURES
  • OPINION

© 2023

Previous Limpopo Maseala Progressive High school celebrates 100% pass rate
Next Group D Permutations – Egypt hoping not to suffer same fate as Ghana