15th July 2008
Inflation rate rises to 3.8%
The rate of Consumer Price Index (CPI) inflation jumped to 3.8% last month, higher than predicted by many analysts.
The news is likely to disappoint retailers hoping for an end to the squeeze on consumers' pockets. On Monday, figures for June showed that factory gate prices had increased at their fastest rate for 20 years.
The figures increase pressure on the Bank of England, which is tasked with keeping CPI inflation at 2.0%, to raise interest rates in order to curb spending.
The British Chambers of Commerce (BCC) has urged the Bank to keep the Bank interest rate on hold at 5.0% until inflation subsides.
"Further increases in CPI inflation, to levels above 4%, are inevitable in the next few months whatever [the Bank] decides to do," said the BCC's economics adviser, David Kern.
"But the impact of higher interest rates on the real economy would be devastating, especially while all the evidence suggests that inflation will fall sharply later in the year and in 2009."
Meanwhile, the British Retail Consortium has said that sales were 0.4% down last month compared to the previous June, after the "early summer blip" which saw consumer spending increase markedly in May.
The news is likely to disappoint retailers hoping for an end to the squeeze on consumers' pockets. On Monday, figures for June showed that factory gate prices had increased at their fastest rate for 20 years.
The figures increase pressure on the Bank of England, which is tasked with keeping CPI inflation at 2.0%, to raise interest rates in order to curb spending.
The British Chambers of Commerce (BCC) has urged the Bank to keep the Bank interest rate on hold at 5.0% until inflation subsides.
"Further increases in CPI inflation, to levels above 4%, are inevitable in the next few months whatever [the Bank] decides to do," said the BCC's economics adviser, David Kern.
"But the impact of higher interest rates on the real economy would be devastating, especially while all the evidence suggests that inflation will fall sharply later in the year and in 2009."
Meanwhile, the British Retail Consortium has said that sales were 0.4% down last month compared to the previous June, after the "early summer blip" which saw consumer spending increase markedly in May.
- 21st November 2008 Official retail figures 'hide tough condition', says BRC
- 20th November 2008 Entrepreneurs 'should be school governors'
- 19th November 2008 Small businesses urged to register hazardous substances
Delicious
Digg
reddit
Facebook
StumbleUpon