Wednesday, 19 January 2011

UK inflation hits 8-month high

Inflation continued to rise in the UK in December. Reuters reports:

A record monthly jump in prices drove inflation to an 8-month high in December, piling pressure on the Bank of England to raise interest rates and show it is not letting inflation get out of control...

The Office for National Statistics said on Tuesday the annual rate of consumer price inflation rose to 3.7 percent last month from 3.3 in November after prices rose a record 1.0 percent between November and December.

Inflation is not quite at that level yet in the US but at least deflation has become unlikely in the near term with continuing signs of economic growth. From Bloomberg on Tuesday:

Orders and sales at factories in the New York region picked up in January, signaling manufacturing will keep contributing to the expansion.

The Federal Reserve Bank of New York’s general economic index rose to 11.9 from a revised 9.9 in December. Economists projected an increase to 12.5, based on the median forecast in a Bloomberg News survey. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut...

The National Association of Home Builders/Wells Fargo sentiment index registered a reading of 16 in January, the same as the past two months and less than the median forecast of economists surveyed by Bloomberg News. Readings below 50 mean more respondents said conditions were poor.

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