UK Inflation Rises To 3.1%
13th December 2017.
Inflation hit a five-year high of 3.1 percent in November as food prices and transport costs pushed up the cost of living.
Mark Carney, the Governor of the Bank of England, must now write a letter to Philip Hammond, the Chancellor, to explain why inflation is so far from the Bank’s 2 percent target.
Food prices are climbing, with the cost of butter up by 23.3 percent since the Summer. Transport and recreational activities are also seeing their prices rise. Package holiday prices have risen 4.9 percent, no doubt threatening Christmas breaks abroad.
The Bank of England raised interest rates back in November but is not expected to raise them further despite the rise in inflation.
Economists believe inflation should be at its peak now and doubt any further movement; though price rises may only decline slowly in the coming months.
This pick-up in inflation has come at a bad time for retailers, who are already struggling with financially strained shoppers.
Richard Lim at Retail Economics acknowledged that the cost of living has become “uncomfortably high” for shoppers, and is concerned that this rise in inflation will force consumers to cut their spending even further.
The recent Black Friday discount holiday back in November was a disappointment for most retailers who found a decline in shoppers than the year before.
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