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UK inflation figures beat forecasts
Source: Bloomberg News |
November 14, 2012, Wednesday
|
Print Edition
Print Edition
UK inflation accelerated more than economists forecast in October as higher university tuition fees pushed consumer-price growth away from the Bank of England's target.
Consumer prices rose 2.7 percent from a year earlier, the fastest since May, compared with a near three-year low of 2.2 percent in September, the Office for National Statistics said in London today.
Inflation was forecast to quicken to 2.4 percent, based on the median of 36 estimates in a Bloomberg News survey.
The figures come on the eve of the Bank of England's quarterly Inflation Report, which may incorporate Governor Mervyn King's view that annual price gains could remain above the central bank's 2 percent target - well into next year.
The report, which presents new projections, will also signal how the bank balances the outlook for inflation against the risk of a relapse in growth after policy makers halted expansion of their bond-purchase program last week.
The impact from tuition fees "is dramatically bigger than it should have been," said Alan Clarke, an economist at Scotiabank Europe Plc in London. "Inflation is probably going to be above target all of next year and there's a chance it may go above 3 percent. That's unfortunate for consumers, and it makes it harder for the Bank of England to deliver more stimulus."
The increase in tuition fees added 0.32 percentage point to inflation last month, according to the statistics office. Lawmakers voted in December 2010 to allow universities to triple fees to up to 9,000 pounds (US$14,300) a year, starting with this year's new student intake, as part of the government's plan to reduce the budget deficit.
Food and transport costs also pushed up the annual rate in October. Increases in gas and electricity prices were not reflected in the data.
Consumer prices rose 2.7 percent from a year earlier, the fastest since May, compared with a near three-year low of 2.2 percent in September, the Office for National Statistics said in London today.
Inflation was forecast to quicken to 2.4 percent, based on the median of 36 estimates in a Bloomberg News survey.
The figures come on the eve of the Bank of England's quarterly Inflation Report, which may incorporate Governor Mervyn King's view that annual price gains could remain above the central bank's 2 percent target - well into next year.
The report, which presents new projections, will also signal how the bank balances the outlook for inflation against the risk of a relapse in growth after policy makers halted expansion of their bond-purchase program last week.
The impact from tuition fees "is dramatically bigger than it should have been," said Alan Clarke, an economist at Scotiabank Europe Plc in London. "Inflation is probably going to be above target all of next year and there's a chance it may go above 3 percent. That's unfortunate for consumers, and it makes it harder for the Bank of England to deliver more stimulus."
The increase in tuition fees added 0.32 percentage point to inflation last month, according to the statistics office. Lawmakers voted in December 2010 to allow universities to triple fees to up to 9,000 pounds (US$14,300) a year, starting with this year's new student intake, as part of the government's plan to reduce the budget deficit.
Food and transport costs also pushed up the annual rate in October. Increases in gas and electricity prices were not reflected in the data.
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