By David Milliken
LONDON (Reuters) – Britain’s inflation problem is worse than in the U.S. or the euro zone, with headline prices rising sharply and signs of persistent underlying pressure growing More, Bank of England policymaker Catherine Mann said on Wednesday. Risk of future financial market volatility as the global economy adjusts to higher borrowing costs.
UK consumer price inflation hits 19 yearly high
1% in October and 8.7% in April, tied with Italy The highest level among the world’s major advanced economies, triggering a sell-off in bond markets as investors bet on more BoE
core inflation – excluding volatile food and energy prices, Mann said This is a better guide to future inflation trends – rising to the highest level on record 1992 at 6.8% last month. The fall back to core rates has also been slower than elsewhere.
“The gap I have in my country (between headline and core CPI) is more persistent than the gap we see in any of my neighbours, the US or the Eurozone,” Mann said. En said during a policy discussion moderated by Swiss asset manager Pictet.
It was really high, it’s come down now, and we’re really starting to see a core of lasting impact through the pricing channel, through wage negotiations,” she added.
Remaining savings COVID-19 The pandemic has increased the ability of UK households to absorb rising company prices, while a rise in the minimum wage (up 9.7% in April) could have knock-on effects Mann Said, to further increase pay levels. They increased to 4.5% this month. After the release of stronger than expected inflation data last week, the market expects inflation to reach 5.5% later this year.
UK Bank Governor Andrew Bailey and other senior central bank officials said that if there were signs of persistent strong inflationary pressures in the financial system, this could lead to “substantial volatility” in exchange rates, asset prices and inflation.
fall’,” she said.
