Saturday, 25 November, 2017

United Kingdom interest rates set to rise as inflation hits 3%

Inflation bites in the UK as households come under price pressure Growth gathering momentum, but where's the inflation?
Jeannie Matthews | 18 October, 2017, 00:46

Carney noted that United Kingdom central bank's monetary policy is encouraging, and in future, United Kingdom economy could face various difficulties.

The CPI data this morning revealed that prices of consumer goods, boosted by food and transport, are climbing at their highest rate since 2012.

Markets will also be paying close attention to Mr Carney's appearance before the Treasury Select Committee today.

"Inflation rising potentially above the 3 percent level in the coming months is something we have anticipated", he told lawmakers on Tuesday.

Tenreyro, meanwhile, aired her opinion that she wasn't yet ready to vote for a rate hike.

Asked whether the MPC had enough interest rate "room" to deal with a possible recession, the Canadian responded: "Building a war chest in interest rate terms for a potential future shock isn't staying on point in terms of the inflation target, nor is it appropriate or necessary, given that policy can move quite nimbly if required".

Disneyland has eerie orange glow as wildfires burn miles away
Vice President Mike Pence said Congress will consider $576 million and new legislation to aid fire suppression in the future. CHP officials were working at day's end to open all but the right lane on the eastbound Riverside Freeway, Olivera said.

Nathan Sweeney, senior investment manager at Architas, agreed a rate rise was now likely next month but said the bigger question was where the Bank went to after that, given that inflation had probably now peaked and the economy was slowing down in response to Brexit.

"The Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate was 2.8% in September 2017, up from 2.7% in August 2017; it was the last higher in March 2012", the ONS said.

Many economists still remained confident that Carney and co would still hike rates at their coming meeting. We expect inflation to approach summit in October.

The pound was little changed by the inflation numbers as most investors have already priced in a likely November rate hike. Inflationary pressures have been mounting since the European Union referendum result in 2016 collapsed the value of the British pound, resulting in more expensive imports.

Two members of the Bank of England's Monetary Policy Committee have spoken cautiously about the prospect of a rate rise next month.

"The overall tone from the testimony supports our view of a rate hike in November", said Barclays after mulling the Q&A session.

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