According to the Office of National Statistics, transport, food and utility bills were the biggest drivers of UK inflation in December – fuel costs rose at their fastest annual rate since July, and food prices showed their biggest annual rise since May 2009.
Mark Bolsom, Head of the UK trading desk at Travelex Global Business Payments commented: “This figure will heap pressure on the Bank of England to raise interest rates, which would come as a blow to consumers who have less disposable income because of VAT hikes. The Bank really is in a very tricky situation. “As food prices and oil costs continue to rise, it is now looking increasingly likely that consumer price inflation will hit four per cent in the first quarter of 2011.” David Kern, chief economist at the British Chambers of Commerce encouraged the Bank to “hold its nerve”, however: “Raising rates at a time when fiscal policy is being tightened, while businesses and individuals are facing greater pressures, would be a mistake and should be avoided.” Image source
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.