Inflation in the United Kingdom has stayed at its highest level since May due to higher electricity and gas costs keeping the consumer-price above the target set by the Bank of England. The consumer prices index (CPI) rate had jumped from 2.2% a much bigger rise than expected.
The London based Office for National Statistics said that consumer prices have risen by 2.7% from 2011 with the biggest increase coming from the price of food and utilities. According the office transport costs fell (which is very difficult to believe) saying that petrol and diesel prices, and the cost of plane tickets fell in November. They predict that inflation will continue to creep up over the course of next year as further scandalous hikes by the gas and electricity companies begin to take effect.
“The next few months we’ll see inflation staying around where it is now,” said Tinsley, an economist at BNP Paribas and a former central bank official. “Mainly it’s down to utility bill hikes that are coming in. The debate about the inflation target will keep on the boil, The big picture is there’s quite a lot of sense in having a higher underlying rate of inflation in the U.K., as we need some way of getting more stimulus into the economy and the current inflation target doesn’t allow a lot more stimulus because inflation is high.”
In a separate report the ONS said that house prices have risen by 1.5% from a year earlier slowing from a 1.7% rate in September. Values jumped by 3.4% in London.
The Pound remains trading close to a two-month high despite the inflation data.
The Pound to Euro exchange rate is currently trading at 1.2302
The Pound to US Dollar exchange rate is currently trading at 1.6220
The Pound to Australian Dollar exchange rate is currently trading at 1.5385
The Euro to US Dollar exchange rate is currently trading at 1.3181
The Euro to Pound exchange rate is currently trading at 0.8126
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