The Bank of England signaled further to increase its interest rates to bring inflation down to the announced target as unemployment fell to the lowest since October 2005.
The U.K. central bank estimated inflation will dip to around 1.8 percent in the middle of next year, later than it predicted in February, before returning to the 2 percent target in two years, assuming rates rise again. Jobless claims declined 15,700 to 890,000 in April.
In the Bank of England quarterly inflation report, inflation soothe down to 2.8 percent as gas companies reduced its prices, but the prices of food and other daily needs goods were up than the normal. The Bank of England has warned that inflation is still a risk in the medium term. In its quarterly report, the Bank said that although energy prices were a big influence on inflation, changes in other prices would be more important.
Recently Policy makers have increased interest rate to 5.50 percent, a six-year high, aiming to settle inflation around projected target, but market expert said that it is not quite enough to keep the inflation under control.
Image: lookingatbuildings
Via: BBC
