UK inflation hits 3yr high
Source: Agencies |
October 19, 2011, Wednesday
|
Print Edition
Print Edition
THE UK's inflation rate jumped to a three-year high of 5.2 percent last month, a bigger-than-expected increase driven by rising power costs, according to official data.
The consumer price inflation rate announced by the Office for National Statistics was a big jump from the 4.5 percent reported a month earlier and beat the market consensus of 4.9 percent.
At a time when average weekly earnings are just 1.8 percent higher than a year ago, household electricity costs rose 7.5 percent and gas leapt 13 percent in a month, the agency said. Clothing and footwear prices rose by 4.4 percent.
The main downward pressure came from a decrease in air fares. Inflation last hit 5.2 percent in September 2008.
The Bank of England has forecast that inflation will peak above 5 percent before reversing.
Chris Williamson, chief economist at financial information company Markit, said increases in petrol prices and sales taxes will flatten between now and January, and commodity prices have eased.
The inflation data is bad news for the government just as unemployment has reached a 17-year high because the September rate is used to adjust benefit payments.
Lately, the Bank of England has been more worried about the sluggish growth of the UK economy than about inflation. Last month its Monetary Policy Committee injected another 75 billion pounds (US$118 billion) in quantitative easing to stimulate the economy.
The consumer price inflation rate announced by the Office for National Statistics was a big jump from the 4.5 percent reported a month earlier and beat the market consensus of 4.9 percent.
At a time when average weekly earnings are just 1.8 percent higher than a year ago, household electricity costs rose 7.5 percent and gas leapt 13 percent in a month, the agency said. Clothing and footwear prices rose by 4.4 percent.
The main downward pressure came from a decrease in air fares. Inflation last hit 5.2 percent in September 2008.
The Bank of England has forecast that inflation will peak above 5 percent before reversing.
Chris Williamson, chief economist at financial information company Markit, said increases in petrol prices and sales taxes will flatten between now and January, and commodity prices have eased.
The inflation data is bad news for the government just as unemployment has reached a 17-year high because the September rate is used to adjust benefit payments.
Lately, the Bank of England has been more worried about the sluggish growth of the UK economy than about inflation. Last month its Monetary Policy Committee injected another 75 billion pounds (US$118 billion) in quantitative easing to stimulate the economy.
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