zerohedge.com / by Tyler Durden / Jan 17, 2017 9:23 AM
Ahead of Theresa May’s speech, which catalyzed the biggest jump in sterling since 2008, the signs were already there that the British currency is facing upward pressure when December U.K. inflation was reported to have accelerated to the fastest pace in more than two years, driven by the tumbling pound which drove a surge in import costs. Consumer-price growth increased to 1.6 percent, the highest since July 2014, from 1.2 percent in November, and above the 1.4% consensus estimte. A separate report showed the cost of imports soared at the fastest annual rate in more than five years according to Bloomberg.
On Monday, BOE’s Mark Carney warned on Monday that rapidly accelerating inflation will put the brakes on consumer spending this year following sterling’s 18 percent depreciation since the Brexit vote. The BOE, which will publish new projections next month, currently expects inflation to breach its 2 percent target soon. It sees the rate pushing close to 3 percent by the end of the year, while some forecasters see it even higher than that. “This is very much the thin end of the wedge and there is plenty more upside to come over the coming months,” said Alan Clarke, an economist at Scotiabank. “We suspect that the bank will turn more hawkish.” It is unclear if that means that the BOE may consider hiking: according to Goldman, not only will the BOE not raise rates for the next two years, but will actually engage in further easing in the not too distant future.
The post Apple Hikes UK App Store Prices By 20% In Response To Plunging Pound appeared first on Silver For The People.