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Category Archives: Bank of England

Slowest rate of UK inflation since November 2009

The Consumer Prices Index (CPI) annual inflation figure now stands at 2.2% for September, according to figures issued this morning by the Office for National Statistics. This is the lowest level for nearly three years when it reached 1.9% in November 2009. The reason for the decline in CPI was largely due to what didn’t happen. Twelve months ago there … Continue reading

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Surprise fall in CPI inflation in UK

There was an unexpected fall in the Consumer Prices Index (CPI) in May to 2.8%, from 3.0% in April. This brought UK inflation to its lowest level in two and a half years. There was also a fall in the Retail Prices Index (RPI) over the same months, from 3.5% to 3.1%. It was only in September last year that … Continue reading

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UK growth revised downwards for last year

UK gross domestic product (GDP) fell by 0.3% in the fourth quarter of 2011, according to the Office for National Statistics (ONS). This follows two previous estimates of – 0.2% for the quarter. This had the effect of reducing total growth in 2011 down to 0.7% from the 0.8% earlier estimate. In the last quarter of 2011 output of the … Continue reading

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A downside to Quantitative Easing?

Pension funds are being hit, and hit hard, by quantitative easing (QE), according to the National Association of Pension Funds (NAPF). The process of QE instituted by the Bank of England in 2009, involves creating money to buy up government bonds. The purpose of this was to put more liquidity into the banks to improve their balance sheets and to … Continue reading

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Has Quantitative Easing actually worked?

 The Bank of England introduced the so-called scheme of Quantitative Easing (QE) in March 2009 and it continued until January 2010. This was an attempt to inject money directly into the economy by buying financial assets on the open market, largely government and corporate bonds. It was introduced because the price of money (Bank Rate) was not working sufficiently to … Continue reading

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What are the implications of the high rate of UK inflation?

The latest figures show that CPI inflation in May remained at 4.5% as can be seen in the graphic below. At the same time RPI annual inflation was 5.2% and RPIX annual inflation, which excludes mortgage interest payments, was 5.3%. The UK CPI figure of 4.5% is well above the current EU average of 3.2%. Because high inflation has reduced … Continue reading

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Big rise in inflation and heartfelt apologies from Mr King

Look away now if you are of a nervous disposition. Latest figures from the ONS this morning show that CPI annual inflation reached 4.5% in April, up from 4.0% in March. The only time CPI inflation was higher than this was in September 2008 when it reached 5.2% which was a record high. The RPI figure came in at 5.3% … Continue reading

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Surprise fall in UK inflation rate

The Consumer Prices Index fell to 4.0% in March from 4.4% in February, according to data released by the Office for National Statistics. This came as a big surprise to most analysts as it was expected that the index would continue to push up to the 5% mark. It seems that we have to be thankful to falls in food … Continue reading

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Shock rise in UK prices

CPI annual inflation, the government’s target measure, was 4.4% in February, which was a substantial rise on the figure of 4.0% recorded in January. Most analysts had been expecting a rise, but not by as much as this. This is the highest figure since October 2008. The main upward pressure on prices came from domestic heating costs – particularly gas, … Continue reading

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The UK’s Inflation Problem: Selling England by the Pound?

This is the title of a speech which Andrew Sentence, of the Bank of England’s Monetary Policy Committee has just given. He is diametrically opposed to Mervyn King’s analysis of the current situation, believing that current levels of inflation are not temporary; that interest rates need to be raised; and, that in not taking action now the Bank is putting … Continue reading

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