12/16/2023 0 Comments Whatsapp laptop loginThe retail prices index (RPI), which is no longer an official inflation measure but is still used to calculate increases in rail fares, mobile phone tariffs and interest on around a quarter of the UK’s debt pile, rose by 11.3pc in the year to May. Jumps in the price of air travel, cinema and theatre tickets, and second-hand cars all contributed to the upward pressure on the cost of living, the ONS said.įood price inflation slowed slightly but is still stubbornly high, with costs on the shop shelves up 18.3pc on the year. Indeed, long-term gilt yields are now well above US Treasury yields for the first time since the immediate aftermath of the 2008 financial crisis.” “This is reflected in long-term government bond yields: the 10-year yield has risen sharply in recent weeks. He added: “While both headline and core inflation is well above target elsewhere too, core inflation appears to be coming down in the US and the eurozone but has now re-accelerated in the UK. Jonas Goltermann, of Capital Economics, said the “UK’s inflation mess” looked increasingly like an outlier among advanced economies. The shock increase prompted investors to bet that interest rates will hit 6pc by the end of this year, while two-year gilt yields spiked. Underlying price rises, which strip out volatile movements in food and energy, climbed to a 31-year high of 7.1pc. The Bank of England is widely expected to raise interest rates from 4.5pc to 4.75pc on Thursday after official data showed inflation remained stubbornly high at 8.7pc in May, unchanged from April. This pushed the UK’s debt above the annual size of the economy for the first time since March 1961 in the aftermath of the Second World War. Soaring benefits payments and an NHS pay deal helped to drive up public borrowing to its highest level in any May outside of lockdown, according to the Office for National Statistics (ONS). Britain’s debt pile has surpassed the size of the economy for the first time in more than six decades, ahead of an expected jump in interest rates that will add billions more to borrowing costs.
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