Nogger's Blog

01/03/11 -- The pound is up above 1.63 against the US dollar for the first time since mid-January 2010 this morning as pundits price in an interest rate rise sooner rather than later.

May or June seems to be a lot of people's favourite once we have an anticipated inflation rate of around 5% plus, from the current 4.7%. Soaring food and fuel prices are seen forcing the BoE's MPC to up base rates from the existing all-time low of 0.5%.

UBS said in a survey that food prices in the UK are rising far more quickly than in other leading global economies. Meanwhile petrol prices are now even higher then when oil reached USD147/barrel in 2008, with now diesel averaging 134.9ppl locally to me (the highest price I recall paying back then was 132.9ppl).

In February the MPC voted 6-3 in favour of leaving rates on hold, more of a split decision than previously, we get to find out the outcome of their March vote next Thursday.

Meanwhile even ABF-owned High Street discount clothing retailer Primark is starting to feel the pinch, saying that the VAT increase had led to a "noticeable" slowing of demand since the turn of the year.

Nationwide say that the housing market is "treading water" with prices up slightly in February, but still fractionally lower than twelve months ago.

On the continemt euro-zone inflation is also up this month, but at 2.4% it's only half of that in the UK.