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16/02/2010
Inflation Rises To 3.5%
UK inflations rates grew by more than half a percent last month - the most substantial jump in over a year.
In December inflation stood at 2.9%. The rise to 3.5% in January has been attributed to the return to 17.5% VAT rates.
Value Added Tax was adjusted to 15% for 13 months to bolster consumer spending. Increased fuel costs have also be highlighted as a reason for the 0.6% jump.
Bank of England Governor Mervyn King has written to the Chancellor to explain the leap in inflation. He is required to do so if the rate drops below, or rises above, 2% by one percentage point.
Mr King described the current inflation rate as "temporary", suggesting it was "subject to some uncertainty" amid a slow return to economic recovery.
Retail Prices Index (RPI) inflation rose up to 3.7% in January, up from 2.4%. This reflects shifts in property prices.
The Bank of England has predicted that inflation rates will drop to 2% by the end of 2010.
Interest rates in the UK have remained at 0.5% for almost a year. It is predicted the bank will hold this in a bid to reduce inflation.
If it is cheaper to borrow money, or gain a return on capital, people are inclined to spend more. Spending effects the demand and supply of goods and services. If demand increases prices are generally driven down. Price reflects the value of goods or services, and inflation is indicative of market values.
(PR/BMcC)
In December inflation stood at 2.9%. The rise to 3.5% in January has been attributed to the return to 17.5% VAT rates.
Value Added Tax was adjusted to 15% for 13 months to bolster consumer spending. Increased fuel costs have also be highlighted as a reason for the 0.6% jump.
Bank of England Governor Mervyn King has written to the Chancellor to explain the leap in inflation. He is required to do so if the rate drops below, or rises above, 2% by one percentage point.
Mr King described the current inflation rate as "temporary", suggesting it was "subject to some uncertainty" amid a slow return to economic recovery.
Retail Prices Index (RPI) inflation rose up to 3.7% in January, up from 2.4%. This reflects shifts in property prices.
The Bank of England has predicted that inflation rates will drop to 2% by the end of 2010.
Interest rates in the UK have remained at 0.5% for almost a year. It is predicted the bank will hold this in a bid to reduce inflation.
If it is cheaper to borrow money, or gain a return on capital, people are inclined to spend more. Spending effects the demand and supply of goods and services. If demand increases prices are generally driven down. Price reflects the value of goods or services, and inflation is indicative of market values.
(PR/BMcC)
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Interest rates rise to 5.5%
The Bank of England has announced that interest rates will rise from 5.25% to 5.5%. The rise is the fourth since last August, bringing the cost of borrowing to its highest level since 2001. The rise has been expected by analysts in order to try and keep inflation down.
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Interest rates kept on hold
The Bank of England has voted to keep interest rates at 5.25% for the second month in a row. The decision is good news for borrowers, as there had been fears that interest rates would be increased to 5.5% this month. If this had happened, homeowners with an average £100,000 mortgage would have faced a rise of £16 per month on their repayments.
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House price inflation rises slightly
House price inflation has risen by 0.8% from 1.8% in October to 2.5% in November, the latest figures produced by the Office of the Deputy Prime Minister (ODPM) have revealed. The rise in UK prices between October and November was attributed to rises in average prices for all types of houses.
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House Prices Rise By 12% In June
UK annual house price inflation in June 2007 was 12.1%, up from 10.8% in May 2007. Annual house price inflation in London was 17.5% in June, up from 14.3% in May. The UK annual house price inflation rate for the 3 months to June was 11.3% and 15.1% in London. The UK house price inflation rate rose from 10.8% in May 2007 to 12.1% in June 2007.
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