U.K. Inflation Hits 3.3%, King Predicts 4% Likely, Sorry Darling
Inflation in the U.K. rose to 3.3% in May from 3.0% the month prior. It was the highest level since at least 1997 when records began. Rising food and energy prices continue to stoke inflation as food prices increased 1.7% after a 1.3% gain in April.
Inflation in the U.K. rose to 3.3% in May from 3.0% the month prior. It was the highest level since at least 1997 when records began. Rising food and energy prices continue to stoke inflation as food prices increased 1.7% after a 1.3% gain in April. Prices also increased across the broader economy as the core reading stripped of food and energy rose to 1.5% from 1.4%, which was the highest since October, led by a 1.6% increase in transportation and a 1.4% gain in household goods.
BoE Governor King was required to write a letter of explanation to Chancellor Darling as to why prices have surpassed the 2% target by more than 1% and what course of action will be undertaken to attempt to reverse its course. The only previous letter was written in April 1997. In his letter he wrote that he expects that inflation will rise above the 4% mark and that the path for interest rates to meet the 2% target was uncertain.
Hardly inspires confidence does it? The pound dropped sharply on the news to $1.9502.
Inflation in the U.K. rose to 3.3% in May from 3.0% the month prior. It was the highest level since at least 1997 when records began. Rising food and energy prices continue to stoke inflation as food prices increased 1.7% after a 1.3% gain in April. Prices also increased across the broader economy as the core reading stripped of food and energy rose to 1.5% from 1.4%, which was the highest since October, led by a 1.6% increase in transportation and a 1.4% gain in household goods.
BoE Governor King was required to write a letter of explanation to Chancellor Darling as to why prices have surpassed the 2% target by more than 1% and what course of action will be undertaken to attempt to reverse its course. The only previous letter was written in April 1997. In his letter he wrote that he expects that inflation will rise above the 4% mark and that the path for interest rates to meet the 2% target was uncertain.
Hardly inspires confidence does it? The pound dropped sharply on the news to $1.9502.