UK INFLATION HIT RECORD HIGH
Another squeeze on British consumers. UK inflation hit a three-year high of 5.2% in September. The consumer price index is being pushed higher by rising gas and electricity bills - and that puts more pressure on Britons' living standards as salaries aren't keeping up with rising prices.
Energy bills rose by 18% on the year,while transport costs were up almost 13% and food prices were 6% higher. In addition, retail price inflation, which includes more housing costs rose 5.6% year-on-year, to its highest level in 20 years. Some analysts say the inflation rises show the risks associated with the Bank of England's recent introduction of a new dose of quantitative easing in an attempt to revive the economy - although it could also increase inflation further.
Christian Schulz is a Senior Economist at Berenberg Bank. SOUNDBITE: Christian Schulz, Senior Economist at Berenberg Bank, saying (English): "The inflation rates are worrying in a sense but the Bank of England will probably not do very much about it because they're more worried about growth. They've just increased their asset purchase target by 756 billion, they're unlikely to do anything on inflation directly."
The Bank of England's inflation target is 2% - but it expects it to drop off sharply next year as the weak economy slows price increases.
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