Caymans Post

A world within. A state apart.
Friday, Apr 19, 2024

Inflation likely to hit 5%, warns Bank of England chief economist

Inflation likely to hit 5%, warns Bank of England chief economist

The Bank of England's new chief economist has warned that UK inflation is likely to hit or surpass 5% by early next year.

Huw Pill told the Financial Times that the Bank would have a "live" decision to make at its next interest rate-setting meeting on 4 November.

It follows recent comments from Bank of England governor Andrew Bailey who said it "will have to act" on inflation.

The UK interest rate has been at a historic low of 0.1% since March 2020.

Recent data showed that inflation growth slowed to 3.1% in the year to September. However, it is expected to increase because of rising energy costs, higher wages to fill record vacancy numbers and supply chain disruption.

Mr Pill, who succeeded the Bank of England's former chief economist Andy Haldane last month, said he would "not be shocked" to see inflation reach 5% or above in the coming months.

He told the Financial Times: "That's a very uncomfortable place for a central bank with an inflation target of 2% to be."

Huw Pill became the Bank of England's chief economist in early September

While Mr Pill declined to say how he would vote when the Bank's interest rate-setting Monetary Policy Committee meets early next month - stating "it is finely balanced" - he said: "I think November is live."

Separately, a survey of consumers found that a high proportion of them expect inflation to rise over the next 12 months.

GfK, the market research group, said that 48% of people it surveyed in October think inflation will accelerate, compared with 34% in September.

Joe Staton, client strategy director at GfK, said: "More and more shoppers expect that costs for goods and services will jump dramatically in the next 12 months.

"This rapid increase will impact our ability to shop and save, and our willingness to spend, at a time when our incomes are outpaced by inflation."

'Tough time'


Tony Brown, chief executive of New Start 2020, which owns Beales department stores, told the BBC's Today programme that retailers were facing higher costs, some of which were being passed on to shoppers.

He said that the cost of a container to ship goods into the UK had risen from about $2,000 (£1,450) a year ago to $18,000.

"The wholesalers are passing those costs onto us," said Mr Brown.

He said that, for example, the cost price of a vacuum cleaner had risen from £49 last year to £79.

"So that cost price has to be passed on, we can't absorb it," Mr Brown said. "We are passing on a proportion of that and having to take a hit on the rest, so it does dilute margins.

"It is a tough time for retail out there and I think what we need more than anything is some sort of calmness in the supply chain."

Some of the world's biggest food producers have also said they have been increasing prices of their products to cope with rising raw material costs, as well as higher energy price and supply chain difficulties.

Unilever, which makes PG Tips, Cornetto, Marmite and Dove skin care, said it had lifted prices and expects that to continue into next year.

The Times reported that Unilever said the cost of palm oil, which the company uses in soap and moisturisers, had risen by 82% over two years because of labour shortages in Indonesia.

 Palm oil prices have increased because of a labour shortage in Indonesia

Poor crop production of soya bean oil in Brazil, which is used in food, has also led to higher prices.

Kraft Heinz, which makes tomato ketchup and baked beans, recently warned that people will have to get used to higher food prices.

And Nestle revealed this week that it too had increased prices, which rose by 2.1% in the third quarter.

The maker of Kit-Kats, Nescafé and Purina pet products said prices had risen on the back of higher energy and raw materials costs, as well as transport.

Newsletter

Related Articles

Caymans Post
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×