Inflationary pressure at a five month high in December – ECRI

UK Inflationary Trends to Continue

UK Inflationary Trends to Continue

According to Economic Cycle Research Institute (ECRI) – indicators designed to predict inflationary trends, suggest inflationary trends in the UK rose to a five month high in December.

The New York based ECRI said that the United Kingdom Future Inflation Gauge (UKFIG) – the barometer to measure inflationary trends, had risen to 103.9 in December from 103.3 recorded in November.

“With the UK Future Inflation Gauge rising to a five-month high, underlying inflation pressures have begun to re-emerge” ECRI’s Lakshman Achuthan said.

Inflation in the UK had touched 3.7 percent in December and is expected to remain above 3 percent for the entire year, a Reuters opinion poll suggests.

Referring to last months data which showed Britain’s economy shrunk by o.5 percent in the last three months of the year, analysts suggest that the uneven recovery pattern may force policymakers from raising rates immediately.

A recent opinion poll conducted by Reuters suggest that economists expect the bank of England to keep rates at the record low of 0.5 percent till the last quarter of the year and raise it to 0.75 percent thereafter.

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