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Markets shift when Germany faces recession and US and UK yield curves reverse – live business | Business



City economists predicted that the CPI would fall to 1.9% – instead, it now exceeds the bank's 2% target.

Unexpected growth may put pressure on Threadneedle Street to raise interest rates, even when economic growth weakens, in a potential sign that the United Kingdom may begin to reflect the stagflation of the 1970s – when growth stalled, but inflation continues to rise.

The bank said it could be forced to raise interest rates if Britain leaves the EU without a deal, saying the pound would fall to raise import costs.

However, most analysts believe that it would be necessary to lower interest rates in order to support jobs and growth.

Sterling has come under strong sales pressure since raising Boris Johnson to 10, but ONS said it is too early to see if the weakness of the pound has begun to increase maintenance costs. It was found that the increase in the prices of computer games, consoles and hotel prices, which increased more than last year, resulted in an increase in the CPI from 2% in June.

Ironically, due to public anger at UK rail ticket prices, ONS said a slight change in the price of an international rail ticket last year prevented UK inflation rising in June.


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