UK inflation hits 40-year record, highest in G7
LONDON, June 22 — Soaring food prices pushed British consumer price inflation to a 40-year high of 9.1 per cent last month, the highest rate out of the Group of Seven countries...
Wednesday, 22 Jun 2022 8:01 PM MYTLONDON, June 22 — Soaring food prices pushed British consumer price inflation to a 40-year high of 9.1 per cent last month, the highest rate out of the Group of Seven countries and one which underlines the severity of the country’s cost-of-living crunch.
The reading was up from 9.0 per cent in April and matched the consensus of a Reuters poll of economists. Records from the Office for National Statistics show May’s inflation was the highest since March 1982 — and worse is likely to come.Sterling, one of the weakest currencies against the US dollar this year, fell below US$1.22 (RM5.37), down 0.6 per cent on the day, before later recovering.
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for the latest news you need to know.for the latest news you need to know.A (June 21): Front-end UK bonds haven’t had it this brutal in ages.for the latest news you need to know.
Wednesday, 22 Jun 2022 8:01 PM MYT LONDON, June 22 — Soaring food prices pushed British consumer price inflation to a 40-year high of 9.1 per cent last month, the highest rate out of the Group of Seven countries and one which underlines the severity of the country’s cost-of-living crunch. With investors turning nervous again about global growth prospects, the US dollar gained ground on most peers. The reading was up from 9. Lest it should be mistaken, the writing has been on the wall for gilts for a long time now.0 per cent in April and matched the consensus of a Reuters poll of economists. Sterling was down 0. Records from the Office for National Statistics show May’s inflation was the highest since March 1982 — and worse is likely to come.
Sterling, one of the weakest currencies against the US dollar this year, fell below US$1.2198 (RM5. In other words, there is a lot more downside for gilts if the BOE stays resolute after its recent epiphany on the need to go faster to quell inflation.22 (RM5.37), down 0.1 per cent last month, the highest rate out of the Group of Seven countries, underlining the severity of the cost-of-living crunch.6 per cent on the day, before later recovering. Over in the US, for example, former Treasury secretary Lawrence Summers reckons the economy needs five years of unemployment above 5% to contain inflation. Some investors judge Britain to be at risk of both persistently high inflation and recession, reflecting its large imported energy bill and ongoing Brexit-related friction which could further hurt trade ties with the European Union.P.
“With the economic outlook so unclear, no one knows how high inflation could go, and how long it will continue for — making fiscal and monetary policy judgements particularly tough,” said Jack Leslie, senior economist at the Resolution Foundation think tank. Earlier on Wednesday the Resolution Foundation said the cost-of-living hit for households was being compounded by Brexit, with damaging long-term implications for productivity and wages. He, however, expected the Bank of England to keep raising rates in an effort to tackle inflation until clear signs emerge that the labour market is weakening. And that means further losses for gilts in the months to come. Average pay is not keeping up with inflation and trade unions have warned of widespread strikes in the coming months. Railway staff have already staged mass walkouts this week. Today’s other main event is the start of US Federal Reserve Chair Jerome Powell’s two-day testimony to Congress, with investors looking for further clues on whether another 75 basis point rate hike is on the cards at the Fed’s July meeting. Britain’s headline inflation rate in May was higher than in the United States, France, Germany and Italy. For more markets commentary, see the MLIV blog.
While Japan and Canada have yet to report consumer price data for May, neither are likely to come close.33 per cent higher at 104. The Bank of England said last week that inflation was likely to remain above 9 per cent over the coming months before peaking at slightly above 11 per cent in October, when regulated household energy bills are due to rise again. Financial markets show interest rates in Britain are on course to rise above 3 per cent around the turn of the year from 1. The euro fell 0.25 per cent now, although most economists think waning economic growth means the BoE will raise rates by less than that. Finance minister Rishi Sunak said after the data that the British government was doing all it could to combat a surge in prices and the central bank would act “forcefully” to contain inflation.0497.
Core issue Prices for food and non-alcoholic drinks rose by 8.7 per cent in annual terms in May — the biggest jump since March 2009 and making this category the biggest driver of annual inflation last month.3 per cent lower at 136. Annual core inflation — which strips out food and energy prices to give an idea of domestically generated cost pressure — fell for the first time since September to 5.9 per cent from 6.71 in early trade, its lowest since October 1998.2 per cent, a lower-than-expected reading.
“The Bank of England may indeed gain some hope from the fact that core price pressures are subsiding (but) we doubt this .08 at the end of 2021... The Bank of Japan last week maintained ultra-low interest rates and vowed to defend its policy of yield curve control (YCC), which effectively caps the yield on the 10-year Japanese government bond at 0. will be enough to avert further rate rises in the coming months,” said Sandra Horsfield, an economist from Investec. Overall consumer prices rose by 0. “Dollar/yen is continuing to trade on the Treasury yields, which have been stable but with the 10-year staying above the 3.
7 per cent in monthly terms in May, the ONS said, a little more than the 0.6 per cent consensus. Commodity currencies Norwegian crown fell 1. Costs paid by British factories for materials and energy — a key determinant of prices later paid by consumers in shops — were 22.1 per cent higher in May than a year earlier, the biggest increase since these records began in 1985, the ONS said.9740, and the Australian dollar fell 1. — Reuters Advertisement .