UK inflation in November
According to a report provided by the United Kingdom’s Office for National Statistics, on a monthly basis, the inflation index rose 0.3% in November 2017 compared to a 0.1% rise in October 2017. It met the market expectation of a 0.3% rise.
On a yearly basis, inflation in the United Kingdom (EWU) was 3.1% in November 2017 compared to a 3% rise in October 2017. It met the market expectation of a 3% rise. It was the highest figure since March 2012. The rise in inflation was mainly supported by the increase in transportation activity and food prices.
Impact on the economy
Rising inflation and falling unemployment in the United Kingdom are signaling a stronger economic condition (UKX-INDEX). It’s also helping the Bank of England policymakers take a hawkish stance. In its November 2017 meeting, the Bank of England raised its key interest rate by 25 basis points for the first time in nearly a decade.
The United States (SPX-INDEX) has been gradually raising its interest rate since December 2015. A gradual rate hike process is appropriate when an economy is showing strength due to improving fundamental factors.
In the next part of this series, we’ll look at US retail sales in November 2017.