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UK inflation shoots past Bank of England target

Tuesday, March 21, 2017 - 01:34

British inflation last month shot past the Bank of England's 2 percent target for the first time since the end of 2013 and looks set to climb further due to the Brexit hit to the pound and rising global oil prices. David Pollard reports.

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So many shops, so little time - but now's there's even more pressure on Brexit Britain's consumers. Prices are going up - and by faster than was forecast. Headline inflation at 2.3 per cent in February is also above official targets - in the biggest jump in over three years. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "You've got the psychological two per cent number being exceeded, and by more than expectations. Obviously that's the sort of target that the government and the Bank of England is looking for. What will be interesting of course is what's now going to happen in the following months." Especially for the Bank of England. Even core inflation is now at two per cent as transport costs rise - food prices were up in February for the first time in over two years. Consumer confidence now looks vulnerable just as Britain faces up to its biggest unknown: Brexit. Theresa May preparing to press the button next week on divorce proceedings with the EU. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "This remains, however, a stab in the dark. Clearly, in terms of actual impact and actual ramifications on the UK economy, those things won't become until we get into the negotiation process to see exactly where we are." Any further weakness in the pound could spike inflation even higher. Many economists already see a three per cent rate over the next year. And with earnings growth now slowing, consumers may be left wondering which way to turn ...

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UK inflation shoots past Bank of England target

Tuesday, March 21, 2017 - 01:34