UK Inflation is no longer in stealth mode
By: GoldCore
GoldSeek.com
Tuesday, 20 June 2017
IHS Markit index shows UK households pessimistic about finances for 2017-208
UK household finances remain under intense pressure from rising living costs
58 percent of respondents expected higher interest rates in 12 months time
Inflation in the United Kingdom currently at near four-year high
Prices up prices by 2.9pc year-on-year, biggest annual increase since June 2013
In May consumer spending in the UK fell for the first time in almost four years
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. John Maynard Keynes, The Economic Consequences of the Peace (1919)
Inflation is taxation without legislation Milton Friedman
Inflation is no longer in stealth mode
Inflation at 2.9% and wage growth lagging behind has meant household consumers in the UK are under intense pressure from rising living costs.
The IHS Markit Index and Survey measures how people feel about their current situation. The June reading changed from 43.8 from 42.6, indicating that households are the most pessimistic about their finances than they have been in three months.
Reports have linked this to the latest Consumer Price Index readings combined with inflation and interest rate expectations. It is no surprise that with weakening economic indicators and an uncertain political outlook that sentiment is falling.
The fall in the British pound, following the 2016 Brexit vote, is seemingly being blamed for this fall in consumer confidence and climb in inflation. Prior to the referendum last June, official inflation was just 0.3%.
Whilst the pound has recovered slightly from it’s tumble post General Election, general sentiment regarding the currency and the general political and economic situation, is weak. Following the Brexit shock the fall in sterling pushed up the cost of imported goods.
Higher interest rates and inflation expectations
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