Pound Hits a One Year High

British households will be facing a substantial cost of living increase over the coming months, as inflation jumped in August - with a major driver of the inflation being an increase in the price of cothing.

shareprices.com - Tuesday, September 12, 2017

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The pound has climbed to a one year high, and core inflation is now at the highest level since 2011.Meanwhile, the world’s stock markets have collectively soared, as the fears about the tensions in North Korea have started to wane.

The new cost of living increase is the second cost of living squeeze that the country has faced in the past ten years. Inflation started to outpace wage growth at the beginning of the financial crisis in 2008, and wages, in real terms, did not turn positive until 2014, however they started to shrink again in early 2017.

Ranko Berich, the head of Market Analysis for Monex Europe, said that the inflation rate in the UK has smashed expectations, and this is one of the reasons that the pound has jumped to a one-year high. However, he is concerned that the spike will cause consumer spending over the coming months, and that this will hinder longer term growth. Inflation is currently at 2.7%. This figure strips out the volatile factors such as petrol and food, and therefore gives a better impression of economic pressure. Analysts at Hargreaves Lansdown believe that this may be the peak for UK inflation, and consumers will certainly be hoping that this is the case, since current figures are putting a lot of pressure on their wallets.


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