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發表於 2007-4-17 17:35:01
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April 17 (Bloomberg) -- U.K. inflation unexpectedly accelerated to 3.1 percent in March, the fastest pace in a decade, sending the pound to $2 for the first time since September 1992 on speculation interest rates will keep rising.
The inflation rate is more than a percentage point above the Bank of England's target, requiring Governor Mervyn King to write a letter of explanation to Chancellor Gordon Brown for the first time since the central bank was granted independence in 1997. King and Brown will hold a press conference at 10:30 a.m. in London.
A boom in London's financial-services industry, surging house prices and consumer spending have bolstered growth in the U.K. economy, Europe's second-biggest. The Bank of England said in February it may have to raise rates once more this year to bring inflation back to its target of 2 percent.
``This makes a May hike inevitable and risks more beyond that,'' said Stewart Robertson, an economist at Morley Fund Management in London, which has about $321 billion of assets.
The pound rallied as high as $2.0003 after the report as investors added to bets that the Bank of England may need to raise borrowing costs more than once this year to contain inflation. The implied rate on the September interest-rate futures contract surged 9 basis points to 5.94 percent.
More Increases?
The inflation rate ``raises the possibility that we see more increases'' after May, said Jonathan Said, an economist at the Center for Economics and Business Research, a London-based consultant, who predicted inflation would touch 3 percent this month. None of the 37 economists surveyed by Bloomberg news had expected a 3.1 percent rate.
The rate on the June contract rose six basis points to 5.8 percent. The contract settles to the three-month London interbank offered rate for the pound, which averaged about 15 basis points more than the central bank benchmark for the past decade.
An increase in the cost of food, non-alcoholic beverages and furniture and household goods pushed up inflation in March, the statistics office said. Eight of the nine categories which make up the index contributed to the higher rate, with the only downward contribution from housing and household services.
So-called core inflation, which excludes energy, food, alcoholic beverages and tobacco, accelerated to 1.9 percent in March, the highest since November 1997, the report showed.
Utility Bills
King still said March 27 that inflation should ``fall back sharply'' in the second half and that utilities' price cuts had been in line with the bank's February forecasts. Scottish & Southern Energy Plc on Feb. 28 became the fourth U.K. utility to say it will cut bills for residential gas and electric customers this year.
The inflation rate over the whole first quarter was 2.9 percent, in line with the central bank's Feb. 14 forecasts.
``We see inflation falling below 2 percent by the end of the year,'' said Karen Ward, an economist at HSBC Holdings Plc who used to work at the central bank. She spoke before the release of today's report.
A rebound in oil prices, up 25 percent since mid-January, has pushed up gasoline prices. A gallon of unleaded gasoline cost an average of $6.49 in the U.K. last month, compared with $6.27 a year ago, according to AA Motoring Trust Ltd., the U.K.'s biggest motoring organization.
Rising fuel prices and faster economic growth, which accelerated to the highest annual rate in two years in the fourth quarter, may allow companies to charge customers more. U.K. factory-gate prices rose the most in 11 months in March, feeding inflation pressures, a statistics office report yesterday showed.
The central bank left its benchmark rate unchanged for a third consecutive month in April and begins its next two-day meeting on May 9. The minutes of the April decision will be released tomorrow at 9:30 a.m. |
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發表於 2007-4-17 17:57:51
