Tuesday, November 16, 2010

Bernanke's Dream: U.K. Inflation Jumps to 3.2%

Bernanke would be happy with bad news like this. The U.K's. inflation rate unexpectedly climbed to 3.2% in October, exceeding the government’s 3% limit.

Forecasts for the near future are not good either. According to Bloomberg, Martin Weale  Bank of England's policy maker, said yesterday that inflation “may well rise further” in the next few months. King presented economic forecasts last week showing it may exceed the bank’s 2%  goal through 2011.

The major components that cause inflation to accelerate were:

  • gasoline and diesel,
  • overdraft charges and mortgage arrangement fees,
  • computer games'
“Inflation over the next few months may well rise further, even if a subsequent decline is expected,” “I certainly worry about the effect on inflationary expectations of introducing additional monetary stimulus.”

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