In Great Britain, the inflation rate surprisingly rose again in February to 10.4%. Analysts had expected a drop of less than ten percent.
Core inflation, excluding energy and food, jumped to 6.2 percent from 5.8 percent.
This is putting increasing pressure on the Bank of England, which will decide interest rates on Thursday.
Bad surprise with inflation in Great Britain. The country is already experiencing one of the strongest and most persistent bouts of inflation of all industrialized countries. In February, the inflation rate unexpectedly rose again from 10.1 percent to 10.4 percent. that share it ONS Statistics Office On Wednesday, on average, analysts had expected a decline to 9.9%.
This puts increasing pressure on the Bank of England to raise interest rates further. The British Central Bank will decide on key interest rates in Great Britain again on Thursday. In the financial markets, the British pound rose after the inflation data. This reflects the expectation of higher interest rates.
UK inflation rose to a four-decade high of 11.1 per cent last October. Since then, inflation has fallen steadily, but only slightly. British statisticians attribute the fact that it is rising again primarily to higher prices for restaurant visits, food and clothing. On the other hand, slight easing comes from the areas of entertainment and culture as well as from fuel prices.
The core inflation rate for all prices except energy and food also shows that inflation continues to spread. It rose again in February from 5.8 percent to 6.2 percent. Here too, analysts had expected the core rate to drop to 5.7%.
The Bank of England before the split
The Bank of England was the first central bank to initiate a change in interest rates in the fall of 2021. Since then, it has raised the key rate ten times – most recently in February to 4.0%. Also in Great Britain, there has recently been speculation that the Bank of England could raise interest rates further
The European Central Bank raised the main interest rate for the eurozone by 0.50 percentage points last week. The US Federal Reserve will decide on key US interest rates on Wednesday. When making interest rate decisions, central banks must find the right balance between fighting inflation and taking into account the rising risks in the banking sector and the shaky economy.
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