UK NEWS
PETROL PRICES SPARK 1.5 PER CENT INFLATION JUMP
The Consumer Prices Index rose to 1.5 per cent last month from 1.1 per cent in September
A RISE IN petrol prices has forced inflation up, marking the first pick-up towards the Bank of England's target since February.
The Consumer Prices Index rose to 1.5 per cent last month from 1.1 per cent in September, the Office for National Statistics (ONS) said.
While average petrol prices slipped 0.8p a litre over the month, it was a much smaller fall than the 7.1p slide seen a year earlier amid collapsing oil prices - adding to inflationary pressure.
EXPRESS VIDEO: PETROL PRICES SET TO SOAR BEFORE CHRISTMAS
Although CPI is still below the Bank of England’s 2 per cent target, today’s figure is slightly above the 1.4 per cent expected by the City.
However, the Bank expects inflation to rise still further above the target in the months ahead, particularly when the temporary cut in VAT is reversed in January.
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Prices at the pumps fell a lot less than a year ago, causing inflation to rise
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Other reasons behind the jump in the CPI over the month included a record rise in the price of second-hand cars due to a shortage of supply, and increasing air fares compared with slashed prices a year earlier.
DVDs and computer games also registered price hikes as well as telephone bills, where increases in landline costs were higher than a year earlier.
The price pressures offset downward influences on the index, particularly from lower bank overdraft charges and mortgage arrangement fees.
The Retail Prices Index, which includes house prices, rose from minus 1.4 per cent to minus 0.8 per cent on the month - the biggest month-on-month rise in more than 19 years.
The same factors influencing the CPI affected the RPI - with the added impact that house prices are now rising compared with falls a year earlier.
Daiwa Securities economist Colin Ellis said the Bank of England was unlikely to be diverted from its policy of record low interest rates and a £200 billion boost to the money supply to combat recession by a short-term rise in inflation.
He said: “Higher energy prices and a weaker exchange rate, which has pushed up goods price inflation this year, cannot by themselves generate permanently higher inflation - they just result in a temporary surge.
“The Monetary Policy Committee should look through these price movements, and the short-term volatility that will be seen over the next few months, and focus instead on underlying inflationary pressures.”
AND UP YOU THEIR INFLATION BASED...
17.11.09, 4:48pm
.....wage and pensions !!!! Petrol in the USA is $2.49 a gallon today, if President Obama can keep costs down why can't Brown
• Posted by: Disgruntled • Report Comment
GET IT RIGHT - BROWN'S TAX POLICY HAS FORCED INFLATION UP
17.11.09, 11:32am
The truth is that a relatively small rise in wholesale petrol prices has caused a disproportionatley large rise in tax paid at the pumps and therefore significantly higher prices to the consumer.
The oil suppliers should not take the primary blame for rising inflation, that is being caused by the high retail tax policy necessary to pay for Brown's economic mismanagement.
• Posted by: Alf_Garnett • Report Comment
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