Insights from the UK and beyond
– Fiona Shaikh is Reuters’ Economic Correspondent, based in London. –
Stubbornly high inflation has proved something of an inconvenience for the Bank of England over the last year, but the unrelenting rise in prices is turning out to be a real headache for ordinary Britons — one which is likely to get worse before it gets any better.
Consumer price inflation — the headline measure targeted by the central bank — accelerated to 4 percent last month, theΒ highest in more than two years and double the BoE’s target.
A great deal of the rise will have been down to the 2-1/2 percentage point rise in value added tax at the start of this year — a one-off move that will drop out of the statistics next year and mechanically bring headline inflation back down again.