Trade Magnates -British pound rose today to 1.3287 in reaction to the UK inflation reaching its highest level in five and a half years September increasing the pressure on the Bank of England to hike the interest rates next month. Sterling was higher against the euro at 0.8872.
The UK annual inflation rose by 3% as forecasted from 2.9% in September as reported by the Office for National Statistics. The cost of living has increased due to the rising of food and housing costs since last year’s Brexit vote.
Bank of England is expected to raise interest rates next month if the prices pressure and growth continue.
BoE Governor Mark Carney comments in his testimony before the TSC that the challenges for the UK housing market are structural and the government’s help to buy scheme is not material for overall UK housing market. Furthermore, he added that in perfect world we wouldn’t be using QE just interest rates and we don’t have to go as close to 2% inflation to start the QE unwind.