UK inflation surges due to rising energy costs, putting pressure on Bank of England
From Morningstar: 2025-05-21 05:16:00
UK inflation rises in April due to increased energy costs, with prices of electricity, gas, and other fuels up by 6.7%. Ofgem raised the energy price cap, leading to a £111 increase for an average household paying by direct debit for dual fuel. UK stocks and sterling initially dipped but are now flat.
Rising energy costs primarily drive UK inflation in April, with water and sewerage prices up by 26.1%. Transport costs also rose by 3.3%, with vehicle excise duty increases noted. Owner-occupiers’ housing costs partially offset these rises. Inflation approaching the BOE’s forecast for 2025 could raise concerns about recent rate cuts.
Bank of England faces discomfort as UK inflation accelerates, nearing the 3.7% forecast for September. Previous rate cuts could be questioned as inflation rises faster than expected. Market prices anticipate two more rate cuts this year. Some urge caution, noting the bank’s room for adjustment due to higher rates compared to continental Europe. 1. The U.S. economy added 943,000 jobs in July, surpassing expectations and marking the second consecutive month of strong job growth. Unemployment rate dropped to 5.4%, lowest since the start of the pandemic, with notable gains in leisure and hospitality sectors.
2. The Tokyo Olympics concluded with the U.S. finishing on top of the medal table with a total of 113 medals, including 39 golds. The games were held under strict COVID-19 protocols, with no spectators and numerous athletes testing positive during the event.
3. The CDC announced that all individuals, regardless of vaccination status, should wear masks indoors in areas with high COVID-19 transmission rates. The decision comes as the Delta variant continues to spread rapidly across the country, leading to an increase in cases and hospitalizations.
4. Apple became the first company to reach a market value of $3 trillion, solidifying its position as the most valuable company in the world. The tech giant’s stock price surged after reporting strong quarterly earnings, driven by robust sales of iPhones, iPads, and Macs.
5. Scientists discovered a new species of ancient human in the Philippines, named Homo luzonensis. The findings, based on fossil evidence from Callao Cave, suggest that the species lived on the island around 50,000 years ago, further expanding our understanding of human evolution in Southeast Asia.
Read more at Morningstar: Surge in UK Inflation Creates Headache for Bank of…