UK’s Annual Inflation Rate Jumps To 2.5%

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UK’s annual inflation rate It rose 2.5 percent in June, beating economists’ expectations, according to data released Wednesday. British pound and government bond yields rose as investors weighed how the central bank would eventually respond to the continued rise in prices.

The speed was the highest since August 2018. Following the 2016 Brexit referendum, the UK went through a period of high inflation initiated by the fall in the pound. Inflation increased 0.5 percent in June compared to the previous month, which was the fifth month in a row.

Analysts said the price increases were broad-based and included food, used cars, clothing and shoes, eating and drinking out, and fuel. Last month, Bank of England policymakers said they expected the inflation rate to drop temporarily. exceeding the 2 percent target, and even exceed 3 percent before falling again.

Price increases are mostly due to items that are part of industries that either fell a lot the previous year or reopened from the winter lockdown. Analysts at the Royal Bank of Canada wrote that this should allow the Bank of England to “continue proving that rising inflation is temporary”.

The potential path to inflation has caught investors and economists globally as they debate whether the rise can be sustained and force central banks to take action. On Tuesday, data showed the annual interest rate inflation in the United States It rose to 5.4 percent, the fastest pace in 13 years. Wednesday, Jerome H. Powell, The head of the Federal Reserve told House lawmakers that inflation has risen “significantly” and is poised to stay higher in the coming months before slowing again.

The pound rose 0.3 percent against the US dollar and tumbled 0.2 percent against the euro. Yields on 10-year bonds fell eight basis points, or 0.08 points, to 1.34 percent.

  • Shares on Wall Street were mixed, with the S&P 500 up 0.1 percent and the Nasdaq down 0.2 percent.

  • Most European indices were lower. The Stoxx Europe 600 Index fell 0.1 percent. In London, the FTSE 100 fell 0.5 percent.

  • Oil prices fell. US crude benchmark West Texas Intermediate futures fell 3.3 percent to $72.72 a barrel.

  • for share Bank of America It fell 2.5 percent after announcing revenue of $21.5 billion, down 4 percent year-on-year and below analysts’ expectations.

  • Delta Its shares fell 1.6 percent after the airline reported that its quarterly profit was still down 55 percent from the same quarter of 2019. His income fell 43 percent from two years ago.

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