| |
| |
 |
| |
|
| |
|
| |
|
LONDON : British annual inflation grew at the fastest pace for 16 years in July as food prices surged, official data revealed on Tuesday, scuppering hope of an interest rate cut to spur flagging growth.
"A (British) rate cut within the next couple of months looks well off the agenda," Capital Economics analyst Vicky Redwood said in response to the "unexpectedly sharp rise" in inflation to 4.4 percent.
The 12-month figure marked the fastest annual rate since April 1992, the Office of National Statistics (ONS) said. It had stood at 3.8 percent in June.
"The largest upward pressure (in July) came from food and non-alcoholic beverages where prices rose this year but fell a year ago," the ONS said.
"Within this division, there were large upward effects from meat, bread and cereals, and vegetables," it added.
The statistics office also said that inflation was fuelled by higher domestic energy prices.
The 12-month inflation figure meanwhile held above the Bank of England's 2.0-percent target for the ninth month in a row and compared with market expectations for a rate of 4.1 percent, according to Dow Jones Newswires.
On a monthly basis, Britain's consumer prices index was unchanged in July from June. Analysts' had forecast a drop of 0.3 percent.
"This is a really disturbing set of data that will not go down at all well at the Bank of England," said Howard Archer, Global Insight's chief economist on the British economy.
"The rise in consumer price inflation to a series high of 4.4 percent in July was well above expectations."
The Bank of England's monetary policy committee (MPC) last week froze British interest rates at 5.0 percent for the fourth month in a row as it sought to contain surging inflation amid slowing economic growth.
On Wednesday the BoE publishes its latest forecasts for British inflation and economic growth.
Britain's economy is meanwhile close to a recession after slowing further during the second quarter as the construction and manufacturing industries weakened.
Gross domestic product grew by only 0.2 percent in the April to June period compared with the first three months of 2008. That was the slowest pace of economic growth for more than three years.
These figures mirror gloomy economic data for the eurozone and United States.
"The threats of recession are worsening," said David Kern, economic adviser to the British Chambers of Commerce.
"Although it is difficult for the MPC to consider rate cuts while inflation is still rising, it should not hesitate to cut rates later" in the year.
However, analyst Archer warned on Tuesday that annual consumer price inflation was set "to go significantly higher still over the coming months, despite the recent retreat in oil prices."
He added: "Indeed, it could well reach 5.0 percent in October, as sharply rising utility bills, elevated food prices and a weaker pound impact." - AFP/de
|
