Tuesday, March 22, 2011

Inflation: U.K. Inflation Rises Steeply to 4.4%

U.K. inflation's rose steeply to 4.4% in February, more than economists forecast. The rate is now the highest in more than two years.
Consumer prices rose 4.4%, the most since October 2008. According to Bloomberg, another report showed the budget deficit unexpectedly widened as well, as government revenue fell.

"Strengthening price pressures pushed three of the bank’s nine policy makers to argue this month for higher interest rates to tame inflation, which is now more than double their 2 percent target. The U.K.’s recovery may still be hampered by the government’s budget squeeze, while officials must also weigh the potential impact on the global economy of the earthquake and tsunami in Japan".

"The gain in inflation was led by clothing prices and the costs of housing services such as heating, the statistics office said. Clothes prices jumped an annual 2.8 percent in February, the most since the data began in 1997. Costs for housing, water, electricity, gas and other fuels were up 3.1 percent on the year, the most since August 2009. "

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