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Realistbear

O N S : Surging Inflation In Raw Materials And Core Output Prices

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http://business.guardian.co.uk/story/0,,17....html?gusrc=rss

Mark Tran

Monday May 8, 2006

The pound rose to its highest level in a year against the dollar in anticipation of higher UK interest rates this year after a surge in raw material costs for manufacturers.
The cost of raw materials increased by 2.5% last month - the fastest rate since July last year
- fuelled by a 10.6% surge in crude oil prices, the Office for National Statistics reported.
Output prices, known also as factory gate prices (prices at which goods are sold), however, slowed slightly to an annual rate of 2.4%. But that was only because duty changes in Gordon Brown's 2006 budget had a smaller upward impact than a year earlier.
Core output prices
, which exclude food, drink, tobacco and petrol and are not affected by changes in excise duty, rose at a rate of 2.2% in the year to April -
the fastest level for nine months.
Increasingly, analysts believe that the Bank of England's next move will be up.
Credit Suisse
last week said it expected borrowing costs to go up to 4.75% at the end of this year and
5.25%
at the end of next year.

With these kinds of statistics flaring up it is difficult to see how Gordon "Miracle Economy" Brown will continue to deny the existence of inflation and keep rates out of line with the worldwide tightening that is under way.

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Increasingly, analysts believe that the Bank of England's next move will be up. Credit Suisse last week said it expected borrowing costs to go up to 4.75% at the end of this year and 5.25% at the end of next year.

It would be as a result of more government interference is they only went up by so little. They need to be 5.5% now.

We have had low rates too long now for 5.5% to be enough! It would hard to predict the top now, but will be over 7% (and that is if they go up immediately) :o

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http://news.bbc.co.uk/1/hi/business/4984084.stm

Factory prices threaten inflation

Manufacturers are raising prices

Rising energy costs are feeding through the UK supply chain - pushing up prices and threatening inflation, the latest official statistics have indicated.
Economists say the data could lead the Bank of England to lift interest rates.

Even the BBC are admitting to inflation now! Can Gordon hang onto his 2% "Miracle Inflation" much longer?

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  • 301 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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