The Bank of England has warned households to expect a sharp rise in inflation next year as the weak pound ramps up the costs of imports and squeezes family finances. The sharp depreciation has made UK exports more competitive but imports more expensive – prompting changes to inflation forecasts. For now, record-low interest rates and a big programme of electronic money printing, known as quantitative easing, was appropriate, he said. His comments about the Bank’s sensitivity to inflation picking up were interpreted by investors as a signal that policymakers were in no hurry to consider cutting interest rates further. It rose against the dollar and euro as some economists said that 0.25% now marked the low point for interest rates and that the next move would probably be up.

Source: The Guardian November 03, 2016 12:16 UTC