Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Inflation likely to hit 5%, warns Bank of England chief economist

Inflation likely to hit 5%, warns Bank of England chief economist

The Bank of England's new chief economist has warned that UK inflation is likely to hit or surpass 5% by early next year.

Huw Pill told the Financial Times that the Bank would have a "live" decision to make at its next interest rate-setting meeting on 4 November.

It follows recent comments from Bank of England governor Andrew Bailey who said it "will have to act" on inflation.

The UK interest rate has been at a historic low of 0.1% since March 2020.

Recent data showed that inflation growth slowed to 3.1% in the year to September. However, it is expected to increase because of rising energy costs, higher wages to fill record vacancy numbers and supply chain disruption.

Mr Pill, who succeeded the Bank of England's former chief economist Andy Haldane last month, said he would "not be shocked" to see inflation reach 5% or above in the coming months.

He told the Financial Times: "That's a very uncomfortable place for a central bank with an inflation target of 2% to be."

Huw Pill became the Bank of England's chief economist in early September

While Mr Pill declined to say how he would vote when the Bank's interest rate-setting Monetary Policy Committee meets early next month - stating "it is finely balanced" - he said: "I think November is live."

Separately, a survey of consumers found that a high proportion of them expect inflation to rise over the next 12 months.

GfK, the market research group, said that 48% of people it surveyed in October think inflation will accelerate, compared with 34% in September.

Joe Staton, client strategy director at GfK, said: "More and more shoppers expect that costs for goods and services will jump dramatically in the next 12 months.

"This rapid increase will impact our ability to shop and save, and our willingness to spend, at a time when our incomes are outpaced by inflation."

'Tough time'


Tony Brown, chief executive of New Start 2020, which owns Beales department stores, told the BBC's Today programme that retailers were facing higher costs, some of which were being passed on to shoppers.

He said that the cost of a container to ship goods into the UK had risen from about $2,000 (£1,450) a year ago to $18,000.

"The wholesalers are passing those costs onto us," said Mr Brown.

He said that, for example, the cost price of a vacuum cleaner had risen from £49 last year to £79.

"So that cost price has to be passed on, we can't absorb it," Mr Brown said. "We are passing on a proportion of that and having to take a hit on the rest, so it does dilute margins.

"It is a tough time for retail out there and I think what we need more than anything is some sort of calmness in the supply chain."

Some of the world's biggest food producers have also said they have been increasing prices of their products to cope with rising raw material costs, as well as higher energy price and supply chain difficulties.

Unilever, which makes PG Tips, Cornetto, Marmite and Dove skin care, said it had lifted prices and expects that to continue into next year.

The Times reported that Unilever said the cost of palm oil, which the company uses in soap and moisturisers, had risen by 82% over two years because of labour shortages in Indonesia.

 Palm oil prices have increased because of a labour shortage in Indonesia

Poor crop production of soya bean oil in Brazil, which is used in food, has also led to higher prices.

Kraft Heinz, which makes tomato ketchup and baked beans, recently warned that people will have to get used to higher food prices.

And Nestle revealed this week that it too had increased prices, which rose by 2.1% in the third quarter.

The maker of Kit-Kats, Nescafé and Purina pet products said prices had risen on the back of higher energy and raw materials costs, as well as transport.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Asian Energy Security Tested as Strait of Hormuz Disruption Threatens Oil Supplies
Iran Sets Three Conditions for Ending Regional War as Diplomatic Efforts Intensify
Iran warns of $200 oil as forces target merchant ships in Gulf
Japan to Release 45 Days of Oil Reserves Amid Iran Conflict
Global Energy Agency Announces Record Release of 400 Million Barrels to Stabilize Oil Markets Amid Hormuz Disruption
U.S. and Israel Intensify Strikes on Iran as Conflict Expands to Lebanon and Gulf States
When the State Replaces the Parent: How Gender Policy Is Redefining Custody and Coercion
Larry Summers, the former U.S. Treasury Secretary, is resigning from Harvard University as fallout continues over his ties to Jeffrey Epstein.
U.S. stocks ended higher on Wednesday, with the Dow gaining about six-tenths of a percent, the S&P 500 adding eight-tenths of a percent, and the tech-heavy Nasdaq climbing roughly one-and-a-quarter percent.
Nvidia posted better than expected results for the January quarter on Wednesday and forecast current quarter revenue above market estimates.
Ukrainian government intensifies pressure on Hungary and Slovakia with oil blockade
Britain’s Channel Crisis: Paying Billions While the Boats Keep Coming
Woman Receives Gift Card for Christmas – Discovers It Is ‘Worth’ 63,000,000,000,000,000 Pounds
United Nations Calls for Global Action Against Disinformation and Hate Speech Online
Tucker Carlson warns of an inevitable clash in Western societies over mass migration
OpenAI CEO Sam Altman praises the rapid progress of Chinese tech companies.
Poland's President Karol Nawrocki ENDS support for Ukrainian citizens:
Italy's PM Giorgia Meloni highlights record employment and economic growth
Chancellor Friedrich Merz Re-elected as CDU Leader, Opposes AfD Influence
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
Two teens arrested in France for alleged terror plot.
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Former President Yoon Suk Yeol Sentenced to Life in Prison for Abuse of Authority
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
German Chancellor Friedrich Merz calls for real name use on social media.
Italian Police Arrest Man After Alleged Attempt to Abduct Toddler at Bergamo Supermarket, Child Hospitalised With Fractured Femur
British Tourist Arrested at Hong Kong Airport After Meltdown and Vandalism
European Commission Plans Purchase Incentives Limited to Vehicles Manufactured Largely in the EU
French District of Pas-de-Calais Introduces Immediate License Suspension for Drivers Using Mobile Phones
Volkswagen Targets €60 Billion in Cost Reductions as Sales Decline and Global Pressures Intensify
Eighty-Year-Old Lottery Winner Sentenced to 16.5 Years for Drug Trafficking
Rubio Calls for Sweeping U.N. Reform, Saying It Has Failed to End Wars in Gaza and Ukraine
10,000 Condoms Distributed at Winter Olympics 2026 Athlete Village Depleted Within 72 Hours
Poland's President Advocates for Evaluating Independent Nuclear Weapons Development
Mayor of Serdobsk in Russia’s Penza Region Resigns After Housing Certificates Granted to Migrant Family Trigger Public Outcry
China’s EV Makers Face Mandatory Return to Physical Buttons and Door Handles in Driver-Distraction Safety Overhaul
UK Green Party Considering Proposal to Legalize Heroin for an Inclusive Society
OpenAI and DeepCent Superintelligence Race: Artificial General Intelligence and AI Agents as a National Security Arms Race
We will protect them from the digital Wild West.’ Another country will ban social media for under-16s
Heineken announces cut of 6,000 jobs due to declining beer demand
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
×