UK inflation hits unexpected jump as economy shows mixed signals
British cost-of-living numbers went up more than experts thought reaching 2.3% last month. Market players changed their mind about quick interest-rate drops while pound got stronger
Last months UK price-rise numbers showed a non-expected jump to 2.3% (way above what number-crunchers thought it would be)
The rise mostly came from house-energy costs with core price growth moving up to 3.3%; services costs went up too - reaching 5% from last months 4.9%. Andrew Bailey from Bank of England keeps saying they wont rush to lower interest-rates
Market players changed their views right after the news: the british pound got stronger but then went back down‚ while government-debt prices dropped down. Some smart-money folks now think there will be less rate-drops by end of next year
James Smith from Resolution Foundation says: “The mix of bigger headline numbers core rates and services costs made a triple-hit of not-so-good news for both regular people and money-rulers“
The Bank of England thinks prices might go even higher in winter-time – maybe hitting 2.5%. Some non-government experts think it could get close to 3% in about a years time. Monica George Michail points out that new tax rules and world-wide money questions might keep rates high for longer
But the clean sweep of higher headline core and services inflation has delivered a triple dose of bad news for families and policymakers alike
Factory prices showed some good news though: they dropped 0.8% compared to last year (biggest drop since covid-times)
The money-folks are now thinking weʼll see two or three rate-drops by late next year but its all still up in the air. Darren Jones from Treasury says theyʼre working on helping with living costs but theres still work to do
