The annual rate of consumer price inflation shot up faster than expected yesterday from 3.3% in May to 3.8% in June – the highest since 1992 and nearly double the Bank of England’s 2 per cent target. Policymakers’ biggest fear is that the speed of the pick-up in prices will lead people to expect continued high inflation, and stoke it by demanding wage increases. Unions yesterday night dismissed calls from the chancellor to curb pay demands.

This entry was posted by James Fontanella on Wednesday, July 16th, 2008 at 5:14 and is filed under Capital markets. Tagged with bank of england, inflation. Edit this entry.