Bri­tish in­fla­tion stead­ies at 5-year high in Oc­to­ber

Kuwait Times - - Business -

LON­DON: Bri­tain’s an­nual in­fla­tion rate stead­ied at a fiveyear high of 3.0 per­cent in Oc­to­ber as ris­ing food prices off­set fall­ing mo­tor fuel costs, of­fi­cial data showed yes­ter­day. The Con­sumer Prices Index 12-month rate was un­changed from the level in Septem­ber, the Of­fice for National Sta­tis­tics said in a state­ment. An­a­lysts’ con­sen­sus fore­cast had been for a slight rise in CPI to 3.1 per­cent.

In­fla­tion has soared this year as a Brexit-hit pound ramped up im­port costs, which led the Bank of Eng­land to raise its key in­ter­est rate for the first time in a decade at a meet­ing ear­lier this month. The BoE tight­ened bor­row­ing costs to 0.50 per­cent from a record-low of 0.25 per­cent, with Bri­tain’s in­fla­tion far above the cen­tral bank’s 2.0-per­cent tar­get rate. Separately yes­ter­day, data from re­search group Kan­tar showed that UK gro­cery price in­fla­tion for the quar­ter end­ing Novem­ber 5 stood at 3.4 per­cent, the high­est level in four years.

Fur­ther rate hike?

At three per­cent over­all, “in­fla­tion looks like it has peaked and... the Bank of Eng­land will tread care­fully”, ING bank econ­o­mist James Smith said fol­low­ing yes­ter­day’s data, adding that an­other rate rise next year re­mained a pos­si­bil­ity.

“Brexit ne­go­ti­a­tions will be a big de­ter­min­ing fac­tor and there are a lot of hur­dles to over­come over the next few months,” he added. Bri­tish Prime Min­is­ter Theresa May be­gins a ma­jor par­lia­men­tary bat­tle over Brexit yes­ter­day. MPs will have their first chance to scru­ti­nize the EU With­drawal Bill, which would for­mally end Bri­tain’s mem­ber­ship of the Euro­pean Union and trans­fer four decades of EU leg­is­la­tion into UK law. Bri­tain is on course to leave the bloc in March 2019. —AFP

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