British inflation soared to its highest level in a decade, reaching 5.1% in November, far exceeding expectations.
This level exceeds the forecast of economists that the annual growth rate of consumer prices will jump from 4.2% in October to 4.8% last month, and is significantly higher than the Bank of England’s forecast of rising to 4.5%.
The Bank of England expects that the inflation rate will not exceed 5% until next spring. The current interest rate is more than two and a half times the 2% inflation target it should always achieve.
Inflation figures, next to Strong labor market data The data released on Tuesday was sufficient to prompt the Bank of England’s Monetary Policy Committee to raise interest rates on Thursday. But the rapid spread of Omicron coronavirus variants has added to the uncertainty of the British economy.
The International Monetary Fund told the Bank of England on Tuesday not to fall into the quagmire of “inaction prejudice,” but said Should raise interest rates To prevent deep-rooted inflation.
The National Bureau of Statistics of the United Kingdom said that the main reason for the increase in inflation is gasoline prices and used car prices, but almost all goods and services have made an upward contribution to inflation, which means that the entire economy is facing extensive price pressures.
Grant Fitzner, chief economist at the National Bureau of Statistics in the United Kingdom, said: “The widespread price increase has caused the inflation rate to rise sharply again, and the current inflation rate is at the highest level in more than a decade.”
“The significant increase in fuel prices has pushed average gasoline prices higher than we’ve seen before. Costs of clothing — which increased after falling at this time last year — and rising prices for food, used cars, and tobacco taxes have all contributed to this month’s currency. Swell.”
Capital Macros British economist Paul Dale said that there is evidence that there is “sustained price pressure” in the data. The core inflation rate excluding energy, food, alcohol and tobacco rose from 3.4% in October to November 4%, which is twice the target of the Bank of England.
“The Bank of England may still be able to ignore the surge in inflation… for the time being,” he said.
The inflation rate is expected to remain close to 5% until April, when the next increase in the energy price ceiling will lead to another increase. The International Monetary Fund on Tuesday expected the interest rate to reach a peak of 5.5%, but economists have been surprised that inflation has risen faster than they expected almost every month this year.
Samuel Tombs, a British economist at Pantheon Macroeconomics, said that the Bank of England’s November interest rate was “disturbingly high” and that interest rates could “surge to around 6% in April” and then the price increase this year was lower than the year-over-year comparison. Time drops.
He still expects that the Bank of England will not take any action this week because “Omicron needs a little more patience.”
According to data from the National Bureau of Statistics of the United Kingdom, one of the reasons for the high inflation rate in the commodity sector is the sharp rise in costs. In November, manufacturing input prices rose at an annual rate of 14.3%. This led to a 9.1% increase in prices charged by British manufacturers compared to the same month last year.
The poorly reputable inflation RPI measure still supports index-linked government bonds, and the annual rate soared to 7.1% in November, which is the highest level of this indicator since March 1991 more than 30 years ago.