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13 September 2017
 |
| Britain`s annual inflation (The Total Investment & Insurance Solutions) |
Britain`s
annual inflation rate accelerated in August, mainly on rising prices for motor
fuels and clothing, official data showed on Tuesday, sending the pound to a
year-high versus the dollar. The Total
Investment & Insurance Solutions
The
Consumer Prices Index (CPI) 12-month rate jumped to 2.9 percent in August
compared to 2.6 percent in July, the Office for National Statistics said in a
statement. The Total Investment &
Insurance Solutions
"Rising
prices for clothing and motor fuels were the main contributors to the increase
in the rate between July and August," the ONS said.
The
latest data beat expectations of a gain to 2.8 percent, according to analysts`
consensus forecast. The Total Investment
& Insurance Solutions
The
higher-than-predicted figure could meanwhile put pressure on the Bank of
England to raise its key interest rate from a record-low level sooner than
expected, although it is not forecast to make any change at Thursday`s regular
policy meeting. The Total Investment
& Insurance Solutions
"With
the Bank of England meeting this week the hawks may well be emboldened by
today`s price growth, but with the pay squeeze entrenching itself more deeply
month by month the policy hawks (wanting a rate hike) will find their room for
manoeuvre sorely limited," said Chris Beauchamp, chief market analyst at
IG trading group, said following Tuesday`s data.
British
inflation has risen sharply in recent months as a Brexit-hit pound raises
import costs. The Total Investment
& Insurance Solutions
However
sterling hit a year-high at $1.3282 in the wake of Tuesday`s data, as traders
bet on the timing of rate tightening from the Bank of England.
"The
inflation data builds a stronger case for the Bank of England to look at hiking
rates but it is not yet strong enough for the monetary policy committee to act
this week," noted Neil Wilson, senior market analyst at ETX Capital.
While
overall inflation is on the rise, wage growth in Britain has stalled, with some
analysts putting the blame partly on Brexit uncertainty, which has seen
companies hold back from hiring.The
Total Investment & Insurance Solutions
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