Inflation Nine Month High
Published / Last Updated on 25/04/2008
Inflation Nine Month High
UK inflation accelerated to a nine month high in February with the CPI measure rising by 0.3 percentage points to 2.5 per cent. The upturn was attributed to a change in the methodology employed for calculating energy costs. Without the change, CPI would have stayed at 2.2 per cent.
With CPI remaining above the 2 per cent target, analysts said the Bank of England faced the problem of squaring rising inflation with a slowing economy.
Our view
Scaremongering tactics. Most economists look for a target inflation rate of 2.5% known as ‘trend growth’. This is where we are now. This is stable.
The interest rate cut may now prevent recession but it may well stimulate inflation. Further cuts in UK interest rates this year will mean inflation and not economic stability. This may not be good for the country as a whole.
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