UK Inflation Higher Than Expected

Posted by Nogger - a legend in his own mind at 11:12 | Categorized as

22/03/11 -- New this morning that UK inflation increased from 4.0% in January to 4.4% in February, beating the markets' expectations of a 0.2% rise, is behind the pounds' new lease of life.

Merv the Swerve will have to get his pen and paper out again to write his "sorry" note to the Chancellor for exceeding the BoE's 2% target for the fifteenth month on the trot no less.

Retail Price Index inflation - which includes mortgage interest payments - rose to 5.5% (from 5.1% in January). That's now the highest rate in 20 years and makes the prospect of an interest rate rise before too long look a bit more likely.

The pound has broken through resistance around 1.6330 against the US dollar and is currently banging on the door of 1.64, a level not seen since Jan 2010 fourteen months ago.