|British cost of living is flying high. Inflation rate rises to 3.7 percent
Tuesday, 18 January 2011
UK inflation jumped in December with the Consumer Prices Index (CPI) rising to 3.7 percent, up from 3.3percent in November.
Retail Prices Index (RPI) inflation - which includes mortgage interest payments - rose to 4.8 percent from 4.7 percent.
This is another headache for the British central market officials, Bank of England to lift interest rates so as to curb rising inflation. Recently the rise in the VAT rate to 20 percent from 17.5 percent could further drive the fuel inflation, which has now remained above the 2 percent target by one percentage point or more for 13 months, reports the BBC.
Prices rose 1 percent between November and December - a record change between those two months.
The chances that the CPI will rise even further in the next few months is a reality and it is expected to reach 4 percent by February or March. The pound rose 0.77 percent higher against the dollar, at $1.60110.
However, with the fear that any shake in the interest rate might push the economy down falling again, the majority of the Bank of England’s Monetary Policy Committee members would not be ready to respond with an early rise in the base rate.
By Scancomark.se Team