Bank of England in a tizz as inflation rates rocket |
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Wed, 20 Apr 2005 01:00
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The Bank of England is apparently feeling pressurized to hike interest rates, by the phenomenally rising annual rate of inflation that hit a seven-year high of 1.9 percent in March. According to the Office for National Statistics (ONS), the sudden inflation rate rise was the outcome of other price surges in petrol, air fares, food as well as furniture.
The survey expounded that the Consumer Price Index (CPI) had been pushed uphill mostly by rising transport costs as airfares registered a hike several months ago. Furthermore, high oil prices that even made news last month did influence the CPI as huge leaps in petrol and diesel prices saw inflation rates soaring high.
| Quick recoveries in furniture prices this year also boosted inflation rates, along with clothing, footwear, food and non-alcoholic beverages, which also contributed to the rise in prices, according to ONS. The current inflation rate was higher than the 1.6 % annual inflation rate recorded in February. It, however, hadn’t crossed the government’s 2 percent target still. Howard Archer, economist at Global Insight said, "This is a nasty surprise ... that significantly increases the chances of an interest rate in hike in May."
The MPC members of the Bank of England, therefore, are keeping a check on the escalating inflation rates as two out of the nine committee members have already case a vote in favour of an interest hike during the monthly pace-setting meeting that took place in March. Currently, the Bank of England has stalled the interest rate at 4.75 percent ever since August.
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