Tuesday, May 17, 2011

U.K Inflation Soars to 4.5%; Investors Now Need to Earn 7.5% to Beat Inflation

Inflation has risen once again in the U.K., this time by a relatively huge 0.5%, now stands at 4.5%.

The government's target is 2%.

The big numbers are causing  the pound to rally, as it creates expectations of rising interest rates.

The Telegraph has an interesting figure: Based on this inflation, basic-rate taxpayers now need a savings account paying 5.63% in order to beat inflation, while higher-rate taxpayers have to earn an interest rate of 7.5% to beat it.

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