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Inflation Spike Looms Closer But No Interest Rate Rise, Bank Of England Minutes Show

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Rising utility and food bills have prompted the Bank’s Monetary Policy Committee (MPC) to raise its expectations for inflation as measured on the consumer prices index (CPI) gauge, according to the record of its July gathering.

“Despite the fall in CPI inflation in June, it was likely that inflation would rise further, to over 5pc, in the coming months,” the minutes said. “In the light of recent developments in utility and food prices, the peak in inflation was likely to be a little higher and come sooner than the Committee had previously expected.” The minutes cited Scottish Power's June announcement that gas and electricty prices will rise next month, which was quickly echoed by British Gas.

Headline, or CPI, inflation is currently running at 4.2pc. Nonetheless the MPC appeared to be no closer to raising interest rates, which might slow the pace of price rises at the expense of the UK’s economic growth.

Members thought that the underlying growth in the second quarter of this year was “modest”, and might be softening further in the current quarter. They were also worried about the “substantial” risks a deepening of the eurozone’s debt crisis would pose to the UK’s economy and financial system.

Luckily it's only an inflation spike.

Expected is the new unexpected.

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Luckily it's only an inflation spike.

Expected is the new unexpected.

It's only a spike. Inflation will start to drop again as the effects of previous Gas rises drops out of the 12 month window.

Then we will all be able to afford everything again.

Oh wait... a fall in inflation isn't the same as a fall in prices.

Even th official level of inflation has been what... 5%ish for a few years now? So what... 20% over then last 5 years?

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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