Weak pound drives in­fla­tion surge

The Myanmar Times - - International Business -

BRI­TISH an­nual in­fla­tion surged to a near two-year high of 1 per­cent in Septem­ber as a tum­bling pound raised prices of im­ported goods and at­tracted tourists.

The Of­fice for Na­tional Sta­tis­tics (ONS) said the jump in the rate, from 0.6pc in Au­gust, was mainly the re­sult of sig­nif­i­cant in­creases to prices of women’s cloth­ing, al­though not nec­es­sar­ily a di­rect re­sult of the pound’s slide in the wake of Bri­tain vot­ing in June to exit the EU.

An­a­lysts, whose con­sen­sus forecast had been for a jump in the an­nual in­fla­tion rate to 0.9pc, noted how­ever that gains to other items, such as ho­tel rooms and oil, had been trig­gered by the pound’s slump.

“The UK Septem­ber in­fla­tion fig­ures were slightly stronger than ex­pected, with the an­nual head­line rate ris­ing to its high­est level since No­vem­ber 2014,” said City In­dex an­a­lyst Kath­leen Brooks.

Sep­a­rately, lux­ury fash­ion com­pany Burberry said its UK sales had rock­eted by more than 30pc in the three months since the Brexit vote, as tourists took ad­van­tage of the weak pound, which has hit 31-year lows against the dol­lar and 7.5-year lows ver­sus the euro.

Of­fer­ing cau­tion on the pound’s role on push­ing up prices, the ONS said that “whilst the de­pre­ci­a­tion in ster­ling is likely to in­crease the cost of im­port­ing goods and out­sourc­ing pro­duc­tion, there are re­ports of busi­nesses hav­ing mea­sures in place to pro­tect against ex­change rate changes in the short-term”. –

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