GBP: newest member of MPC admits he’s not in favour of raising interest rates

UK inflation was shown to have risen to 3% to reach its highest level for five and a half years. Although the figure came in as expected, it still highlights how the British public are continue to be squeezed, as inflation continues to outpace real wage growth. While the increase to 3% puts pressure on the Bank of England to increase interest rates when they meet next month, many are arguing that the UK economy is simply not strong enough to justify an increase.

In addition, the retail price index rose to 3.9%, meaning that, under current rules, UK companies will have to pay 3.9% more in business rates. The effects of Brexit are beginning to become clearer, as the weakened pound makes the goods we import more expensive. Ultimately, this is contributing to increased inflation. When we compare this to the eurozone’s inflation of 1.5%, it makes for even starker reading.

Meanwhile, BoE’s Deputy Governor Sir Dave Ramsden revealed that he wasn’t one of the Monetary Policy Committee members who said they were close to voting for an interest rate rise. It is becoming extremely difficult to call, although the markets seem relatively convinced that a hike is on the cards.

Today we have the unemployment figures, average earnings, and jobless claims.