UK Inflation beat expectations
Published: Tuesday 18 October 2016
UK Inflation beat expectations at 1% from forecast 0.9% (previous 0.6%) marking the highest rate in nearly two years. Rising prices for clothes, hotel rooms and petrol are largely responsible for this. Clothes in particular saw its biggest price rise since 2010.
However, the Office for National Statistics (ONS) said there was ‘no explicit evidence’ the lower Pound was the reason for rising prices. Economists have predicted that prices will rise further, particularly when the Pound affects food and clothes pricing. It seems we’re on track to hit the 2% target and potentially exceed it. The Pound strengthened as a result to weekly highs across the board passing 1.1160 vs EUR and 1.2290 vs USD.
US Consumer Prices also rose in September from 0.2% to 0.3% as the cost of petrol and rent surged, suggesting a steady build-up of inflation pressures that could keep the Federal Reserve System (FED) well on track to raise interest rates in December.
Latest FX news by Joe De Berniere