In November, the United Kingdom’s inflation increased to 3.1 percent, bringing it to its highest point in almost six years. The result will be a further squeeze on British consumers.
Plane Tickets and Computer Games
Airfares and computer games played a role in sending the inflation higher, said the Office for National Statistics (ONS).The majority of the current data revealed that despite the speed of the inflation growth, weekly wages were growing a rate of only 2.2 percent.
Bank of England governor, Mark Carney will now be tasked with addressing a letter to Chancellor Philip Hammond. The purpose will be to describe the way the Bank plans to return inflation to its target of 2 percent. Carney is required to write to the chancellor whenever the Consumer Prices Index (CPI) inflation rate drops below 1 percent or rises above 3 percent.
Back in November, the Bank of England hiked its key interest rate. This represented the first time the bank took that action in over ten years. The rate was boosted from 0.25 percent to 0.5 percent. That said, when the Bank of England publishes its Monetary Policy Committee meeting results, is not likely to announce that it will be increasing the rate any further.
The Rate was Expected to Peak
Carney stated that the inflation peak was expected and that he’d known it would arrive in either October or November.
The last time Carney was required to write to the chancellor was a year ago, in December 2016. At that time, the letter was about the inflation’s having dropped to 0.9 percent in October.
The most recent letter will be published in February. It will be at that time that the Bank of England will publish its Inflation Report, a publication which occurs quarterly.
The inflation rate has been low for quite some time. Still, the most recent inflation peak remains far from one that occurred in November 2011. When it had been 5.2 percent. While it is by no means unheard of for insurance rates to rise above 3 percent, what has the potential to be problematic in this most recent case is that the wages are not keeping up with those increases.
Take The Next Step with Alvexo Leave your details and we’ll reach out shortly.