Financial journalists and datameisters love measuring numbers a few different ways a) in terms of the fastest or biggest jump, b) in terms of a jump to a highest level, or c) if neither applies, finding the smallest time frame to apply them within and recrunching for maximum white noise. (Basically, if there isn’t a superlative, then make a superlative.) However, in the case of the U.K.’s inflation numbers today, no such effort was needed.
Britain's inflation rate jumped the most since 2002 to the highest in more than a year, making it harder for the Bank of England to support economic growth by cutting interest rates.
Consumer prices climbed 3 percent from a year earlier, compared with 2.5 percent in March, the Office for National Statistics said today in London. The result was the highest in 13 months and exceeded the 2.6 percent median prediction of 37 economists in a Bloomberg News survey. Prices rose 0.8 percent on the month, the most in almost seven years.
"This puts the cat among the pigeons in the U.K.," said Trevor Williams, chief economist at Lloyds TSB Group Plc and a former British government economist. "Interest-rate cuts are totally off the agenda. The underlying problem we face in the real economy is inflation."
Inflation, stoked by food and energy costs, is now within 0.1 percentage point of the government's upper limit, adding to the danger that higher consumer prices become entrenched in the economy. That may hinder policy makers as they seek to avert a recession by lowering the benchmark lending rate, which they already cut three times since December to 5 percent.
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