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Inflation Now out of the Grip
Surging food and petrol prices pushed inflation to 3.8% in June making the life of credit crunch hit life of the UK worse.
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July 17, 2008 (FPRC) -- The policy makers at the Bank of England dealt a fresh blow after surging food and petrol prices pushed inflation to a deadly high of 3.8% in June. This is higher than the expected 3.6% and nearly double of the Bank's 2% target. According to the reports of the Office for National Statistics,the Consumer Prices Index (CPI) measure jumped from 3.3% in May. The Bank's official inflation benchmark is now at the highest level since Consumer Price Index records began in January 1997. Based on historical data prior to this alarmingly high, inflation was last higher in May 1992.
The worse-than-expected figures regarding Inflation mean the Bank has less breathing space to cut interest rates despite mounting signs of the economic slowdown. The down turn has prompted fears over a recession. The deadly rise in food prices was one of the main reasons behind the inflation jump. It has highlighted the hikes faced by consumers in their weekly shopping bills. Last month saw large increases in beef and pork sausage prices, as well as big hikes in the cost of rice, white bread, biscuits and frozen pizza. The cost of milk also increased by around 10p for four pints and 4p for two pints.
The rise in food, petrol and gas and electricity costs were partially offset by a lower increase in mortgage payments than 2007 and a downward impact from sliding immovable property prices.
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