Why did UK inflation increase to 4%?
Does this mean that the BoE will have to increase rates since the targeted inflation rate is only 2%?
Great question, financemum. the general consensus is that the inflation rise is due to a couple of things - primarily the increase in VAT to 20%, the weak pound, and the rising costs of commodities such as petrol, oil, cotton, etc.
BoE rate rises are still up for discussion, although with the recent drop in inflation (albeit small), it is not thought likely that rate rises will be increasing. | 04.13.11 @ 09:12