June 13, 2024
UK Inflation Unexpectedly Quickens
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UK Inflation Unexpectedly Quickens

According to new data yesterday, British inflation unexpectedly rose in December, dashing expectations of a slowdown and reducing hopes of an early interest rate cut and prolonging a cost-of-living squeeze before an election.

In a statement, the Office for National Statistics says the Consumer Price Index accelerated slightly to four percent last month, as rising alcohol and tobacco prices sparked the first increase since February. 

The figure is double the Bank of England’s official target of two percent, and the highest level in the Group of Seven rich nations.

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The data is a blow to the embattled Conservative Prime Minister, Rishi Sunak, who is trailing behind opposition Labour leader Keir Starmer in opinion polls ahead of a general election this year.

Britain’s recession-threatened economy is already buckling under a cost-of-living crisis and increasing industrial unrest over pay.

The Bank of England has lifted interest rates to a 15-year peak in a bid to dampen inflation, but this has worsened the squeeze because commercial lenders pass on loan costs to businesses and consumers.

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