Inflation in the UK accelerated at the fastest pace in almost two years last month as businesses reopened and social distance restrictions were relaxed. Consumer prices rise 2.1% In May compared to last year, the National Bureau of Statistics said Wednesday.
This is the first time since July 2019 that annual inflation has exceeded the Bank of England’s target of 2%. Inflation was 1.5% in April.
May prices rose 0.6% month-on-month due to increased clothing, transportation and transportation. Restaurants and hotels, And recreational costs such as downloading computer games.
Throughout the West, policymakers and investors are closely watching inflation for signs of current upward pressure on prices, whether it is temporary or staying here. Some of the surge in annual inflation can be explained by the fact that prices were very low a year before the economy closed in response to the pandemic.
However, resumptions are causing prices to skyrocket as companies keep up with the surge in demand. If inflation stays high and continues to rise faster than expected, it could be a sign that the economy is overheating, forcing central banks to withdraw monetary stimulus.On Wednesday, the Federal Reserve Board will make the following policy announcements in it: Rising US inflation expectations..
“Increasing price pressure in the UK is part of a global phenomenon as the world moves away from the Covid-19 pandemic,” said Ambrose Crofton, strategist at JPMorgan Asset Management. “As a result, central banks are gradually on their toes towards the end of an urgent financial assistance program.”
The· Bank of England Inflation is expected to rise to about 2.5% by the end of this year and then fall. The next policy meeting is June 24th.
UK inflation exceeds central bank 2% target
Source link UK inflation exceeds central bank 2% target