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The UK’s inflation rate has risen for the second consecutive month, marking its quickest increase since March. According to official figures, the inflation rate jumped to 2.6% for the year up to November. The price of fuel and clothing were identified as driving factors behind the rise, while rising ticket prices for entertainment events were also an influence.
Despite interest rates attempts to keep inflation within its target 2%, data from the Office for National Statistics (ONS) indicates that prices continue to increase. The Bank of England will announce its latest decision regarding interest rates on Thursday, but it is anticipated that rates will remain at 4.75%. “Inflation rose again this month as prices of motor fuel and clothing increased this year but fell a year ago,” said Grant Fitzner, chief economist at the ONS.
Reacting to the figures, Chancellor Rachel Reeves acknowledged that UK families are still struggling with the rising cost of living. However, she is continuing to fight for change to ensure more money goes into the pockets of working families. Shadow Chancellor, Mel Stride, criticised the Chancellor for making “a series of irresponsible and inflationary decisions”, warning that higher shop prices and mortgage rates are staying highest for a longer period of time.
In conjunction with Tuesday’s data, which shows further acceleration in wage growth, Paul Dales, Capital Economics’ chief UK economist, suggested that an interest rate cut on Thursday is unlikely. Nonetheless, Capital Economics predicts that inflation will increase and then decrease again in January, stabilising close to the Bank of England’s 2% objective by the end of next year
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