UK prices continue to climb

  Consumer price inflation in January remained at 3 per cent for the second month in a row. This provided a firmer ground for the Bank of England (BoE) to start winding down its monetary stimulus earlier than was anticipated. Only last week the BoE indicated it might raise rates “faster and sooner” to ease […]

13th February 2018 | Miles Eakers

 

Consumer price inflation in January remained at 3 per cent for the second month in a row. This provided a firmer ground for the Bank of England (BoE) to start winding down its monetary stimulus earlier than was anticipated. Only last week the BoE indicated it might raise rates “faster and sooner” to ease inflationary pressure.

Rising inflation is also affecting the property market, according to the Office for National Statistics. The average home price in the UK last December was £227,000 – £12,000 more than a year before.

These figures provided some support for Sterling, which rose above the $1.39 level against the US Dollar.

In other news, UK Prime Minister Theresa May has suggested she is prepared to bring forward Brexit day by three months to December 2020. As a result, Britain will not be included into the EU’s next financial round.

Secretary of State for Foreign Affairs Boris Johnson is due to give a speech tomorrow, 14 February, in an attempt to provide a more liberal view of Brexit. This will be the first of six speeches on Brexit by senior British ministers as Theresa May is preparing to outline her post-Brexit vision.

US

According to Goldman Sachs Asset Management, US Treasury yields are likely to rise to 3.5 per cent as the Federal Reserve has pledged to raise interest rates four times this year. It has stated this level is not a particularly “brave forecast”.

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