Inflation in U.K. rises to the highest level since 2014. The import cost boost to four year top on clear evidence that the Sterling is droping againts other major currencies. Consumer-price growth picked up to 0.6 percent from 0.5 percent in June, showing the data comming from the Office of National Statistics in London.
Input costs surged an annual 4.3 percent last month, ending 32 consecutive declines, while import prices jumped the most since 2011.
After weeks of surveys, the inflation numbers mark the first hard numbers on the economy in the wake of the Brexit vote in June. As we expected and wrote in previous article’s this will rise more and more and those signs of reccesion are only the beggining for the hard time in the Kingdom. .
While the full economic impact of the U.K.’s decision to leave the European Union will take time to be seen, data this week on the labor market, retail sales and the public finances will be scrutinized for clues. However, the lower outlook for growth means that the Bank of England will continue to ‘look through’ this and is likely to deliver a further rate cut later this year. The pound has dropped about 13% against the dollar since the referendum. As a result, the BOE expects inflation to reach its 2% target faster than previously anticipated, though that didn’t stop it responding to Brexit threats with new stimulus this month. Early upward pressure on prices was largely seen last month in import costs for materials such as metals, parts and chemicals, which rose an annual 6.5 percent.