The question is not whether inflation will continue rising in 2017 but how high it will move. At least 3%,maybe even higher …It seems so obvious. The Bank of England sets interest rates to hit the government’s 2% inflation target. Inflation is currently 2.3% and – despite holding steady in March – is certain to move higher over the coming months. Higher borrowing costs choke off inflationary pressure. Therefore interest rates should now be going up.
In reality, it is a bit more complicated than that. The first thing the nine members of the Bank’s monetary policy committee enjoy to settle is whether the above-target inflation seen in the final couple of months is a temporary blip. It’s quite clear it isn’t. Food is going up, and energy companies are raising their tariffs,retailers are passing on the higher costs of imports caused by a weaker pound. Related: UK inflation stays at three-year high of 2.3% Continue reading...
Source: theguardian.com