Home » Money

Will UK interest rates rise as inflation outstrips wage growth?

14 February, 2018, 18:05 | Author: Samuel Sharp
  • Dollar Advances As Strong US Consumer Inflation Backs Fed Rate Hike Hopes

Petrol rose by 1.1p per litre on the month to 121p per litre, while diesel rose by 1p to 124.5p per litre.

Inflation rose 2.1 percent from a year earlier and core prices increased 1.8 percent.

"We will be looking for an increase when the ONS reports next week". The Fed said in December that it anticipates three interest rate increases in 2018, and newly seated Fed Chair Jerome Powell hinted Tuesday that the central bank would not deviate from those plans going forward, so long as the market shows signs of continued growth.

Mel Stride, Financial Secretary to the Treasury said: The good news is that inflation is expected to fall this year. But they are yet to reach last year's profitability levels.

Whether you're invested in bonds or considering a auto loan, you should know what's up with the Consumer Price Index (CPI).

Dow futures fell more than 200 points in response to the news. The 10-year was at 2.82 percent ahead of the report.


"The finance part of the story as reflected by bank credit growth to manufacturing or debt issuances from non-finance companies does not support the idea that there has been a major turnaround in investment in infra or manufacturing", he said. Gasoline prices rose 5.7% in the month and fuel oil costs were up 9.5% after very cold weather in the eastern U.S. Apparel prices were up 1.7% in the month. As the bulk of independent forecasters have noted for some time, this can be attributed to the related combination of a weak investment cycle, persistent Brexit uncertainty, and higher inflation. That strong pay number spooked investors, sparking a sell-off that knocked stocks down 10% from their January 26 peak and into correction territory for the first time in two years.

"Our long-held view of higher United Kingdom rates and sterling still stands, but in the short term the politics, stretched market positioning and the state of the global risk environment may provide headwinds against the pound", said Nomura currency strategist Jordan Rochester. That was biggest monthly gain since 1990.

The Sterling traded higher against the USA dollar on Tuesday on news of the British inflation rate rallying with the pound recording a high of 1.3900 from trading at around 1.3883 from the earlier trading session.

Gas prices have risen a bit more this month: On Wednesday, the nationwide average gas price was $2.56 a gallon, up three cents from a month earlier. So, even a softening of inflation today on less sterling depreciation passthrough is unlikely to change the thinking much within the MPC (monetary policy committee).

Thomas Wells, manager of the Smith & Williamson Global Inflation-Linked Bond fund, said: "UK inflation remains elevated, and with CPI remaining at 3.0%, there is a good probability the BoE will not be able to get CPI inflation back to the 2% target this year".

Recommended:

  • Olympic Alpine Skiing Schedule 2018

    Olympic Alpine Skiing Schedule 2018

    The women's slalom became the third Alpine ski race to be postponed at the Olympics . No one has ever won all five at an Olympic games, man or woman.
    Markets Right Now: Dow down 800 as stocks sink steadily

    Markets Right Now: Dow down 800 as stocks sink steadily

    Many investors justified that by pointing out that interest rates were low and few alternatives looked like better investments. The market, now in its second-longest bull run of all time, had not seen a correction for two years, an unusually long time.
    Freezing temps can't stop Tonga's glistening flag bearer

    Freezing temps can't stop Tonga's glistening flag bearer

    The display of Tonga Winter Olympics pride will air tonight in America, but here's a sneak peek of what's to come. He said: 'I'm still alive today, so I was honest.
  • United Kingdom  foreign minister set to visit Rohingya refugee camp

    United Kingdom foreign minister set to visit Rohingya refugee camp

    Doctors Without Borders (Medecins Sans Frontieres) estimates 6,700 Rohingya died in the first month of violence. Mr Johnson visited a UNICEF child-friendly site where he saw the efforts being made to keep young people safe.
    Former Patriots OC joins the growing chorus in shading Josh McDaniels

    Former Patriots OC joins the growing chorus in shading Josh McDaniels

    The Colts are now reviewing their options once more, but Ballard remains confident of hiring a new head coach soon. It could be a coaching decision, a team, a player movement or something else.
    VENEZUELA: Presidential Elections Scheduled For April 22

    VENEZUELA: Presidential Elections Scheduled For April 22

    The views expressed therein are not necessarily those of stlucianewsonline.com, its sponsors or advertisers. And the Venezuelan opposition is divided into several different factions.
  • Revenge? Puel is insouciant about Mahrez

    Revenge? Puel is insouciant about Mahrez

    The Algeria global failed to show up at the King Power Stadium after his move to the Etihad Stadium fell through. It's hard to resist against this team. 'I want to protect all the squad, it is the most important thing.
    Prince Harry and Prince William's secret step-sister

    Prince Harry and Prince William's secret step-sister

    Although Wendy's comments are in the news, she's actually referenced Meghan's alleged request to work on The Wendy Williams Show. According to Jenny Swire, contributing fashion director at Wedding Venues Magazine Ms.
    Uber, Waymo reach self-driving auto  settlement

    Uber, Waymo reach self-driving auto settlement

    As part of the settlement, Waymo will get a 0.34pc stake in Uber, worth $245m (£177m) at its latest valuation. That's a win for Uber, considering the $1 billon settlement Waymo sought past year .
  • Chris Mazdzer wins USA's first-ever male singles luge medal

    Chris Mazdzer wins USA's first-ever male singles luge medal

    Today in PyeongChang, he was going for a third straight gold medal, and would become only the second man in history to do so. Austria's David Gleirscher took gold and Germany's Johannes Ludwig bronze.
    Winter Olympics: Teenager Red Gerard wins first USA  medal

    Winter Olympics: Teenager Red Gerard wins first USA medal

    Norwegians Staale Sandbech and Markus Kleveland slipped up during their last shots, too, leaving only Parrot in Gerard's way. And he now can do what no other snowboarder has done since the discipline entered the Olympics: win two medals.
    NASA just published the farthest-ever images taken in space

    NASA just published the farthest-ever images taken in space

    He further said that now they have been able to make images farther from Earth than any spacecraft in history. With its latest wake-up, it broke the record for the farthest image humanity has ever taken away from Earth.


Popular

Tai Tuivasa Discusses His UFC 221 Bout With Cyril Asker
Luke Rockhold can win the interim middleweight title but Romero won't claim the belt if he wins the fight. Rockhold appears to be in good spirits, though, who took to social media to congratulate the victor .

Petr Cech Rues Out-of-Form Lacazette's Missed Chances in Tottenham Defeat
Following the disappointing loss, Arsenal are glued in the sixth place on the EPL standings with 45 points, five behind fifth-placed Chelsea who still have a game to play.

Frank Reich to be new Indianapolis Colts head coach
Philadelphia Eagles offensive coordinator Frank Reich is also a top candidate and seems to be the most likely to be hired. After the Josh McDaniels fiasco, the Colts have locked in their head coach, Eagles' offensive coordinator Frank Reich .

Prince Tribute Highlight's Justin Timberlake Super Bowl Halftime Show (Week in Review)
The lady told us we were in a good section, but we had no idea that Justin was going to be there", McKenna recalled. "Oh, my God. McKenna was soon teary-eyed once more, when DeGeneres surprised the teen by having Timberlake call into the show.

Eurostar confirms April launch date for London-Amsterdam
It will target potential converts by saying a London-Amsterdam Eurostar journey emits 80% less carbonthan the equivalent flight. These customers will see their journey time cut by 17 minutes as the time onboard is reduced from 2hr05 to 1hr48.

Father who attacked Nassar will donate GoFundMe money
Geddert abruptly resigned last month after USA Gymnastics suspended him as part of an internal investigation. In Texas, authorities still are investigating his conduct at a gymnastics training center.

Apple confirms iPhone source code leak
There are also concerns it could uncover new security vulnerabilities in iOS, which may be found by attackers. Apple though ruled out any such possibility claiming the iBoot process that has got leaked pertains to iOS 9.

Winter Olympics 2018: CAS upholds Russian ban
An IOC spokesperson said, "We welcome this decision which supports the fight against doping and brings clarity for all athletes". In a telephone interview, Reedie told The Associated Press: "I am delighted at the decision and the way they expressed it".

Up to 10 inches of snow expected by Friday evening in Chicago
Snow across southern and central MI ranged from 7 inches on the western side of the state to about 5 inches in the Detroit area. The storm could dump up to a foot (30 cm) of snow in NY state as it picks up moisture off the Great Lakes, he added.

Cardin Introduces Bill to Prohibit a Trump Military Parade
Paul's protest forced Congress to miss a midnight deadline for passing a funding measure to keep the government operating. A band of tea party Republicans swung against the legislation as well, repelled by its spiraling spending levels.