AFP, London :
Cracks are appearing in Britain’s economy, putting more pressure on Prime Minister Theresa May as she heads into an EU summit where a breakthrough in Brexit talks appeared unlikely Thursday.
Official data showed that British retail sales fell more than expected in September, against a backdrop of rising inflation largely caused by a Brexit-hit pound.
The UK’s annual inflation rate accelerated to 3.0 percent in September, the highest level in more than five years, fuelled by rising commodity, food and transport prices, separate figures revealed this week.
Analysts believe the jump could persuade the the Bank of England to lift its main interest rates as early as November.
Even though the country’s unemployment remains at a 42-year low, wages growth is failing to keep pace with inflation.
“In the UK, retail sales wrapped up a week of important economic releases and left us with a bitter taste,” said Oanda analyst, Craig Erlam.
“While the inflation and jobs data may be seen as justifying a rate hike from the Bank of England, today’s (retail) data should be a warning to policy makers that the economy is not in a good position to take it,” he said.
Should the BoE hike its rate next month as widely expected to 0.50 percent from a record low of 0.25 percent, it would place further strain on borrowers, but boost savers.
The Organisation for Economic Co-operation and Development on Tuesday said that reversing Britain’s shock Brexit referendum would hand a “positive” and “significant” boost to the economy.
The forecast came as the OECD left its economic growth predictions for Britain unchanged at 1.6 percent in 2017 and one percent next year.
Cracks are appearing in Britain’s economy, putting more pressure on Prime Minister Theresa May as she heads into an EU summit where a breakthrough in Brexit talks appeared unlikely Thursday.
Official data showed that British retail sales fell more than expected in September, against a backdrop of rising inflation largely caused by a Brexit-hit pound.
The UK’s annual inflation rate accelerated to 3.0 percent in September, the highest level in more than five years, fuelled by rising commodity, food and transport prices, separate figures revealed this week.
Analysts believe the jump could persuade the the Bank of England to lift its main interest rates as early as November.
Even though the country’s unemployment remains at a 42-year low, wages growth is failing to keep pace with inflation.
“In the UK, retail sales wrapped up a week of important economic releases and left us with a bitter taste,” said Oanda analyst, Craig Erlam.
“While the inflation and jobs data may be seen as justifying a rate hike from the Bank of England, today’s (retail) data should be a warning to policy makers that the economy is not in a good position to take it,” he said.
Should the BoE hike its rate next month as widely expected to 0.50 percent from a record low of 0.25 percent, it would place further strain on borrowers, but boost savers.
The Organisation for Economic Co-operation and Development on Tuesday said that reversing Britain’s shock Brexit referendum would hand a “positive” and “significant” boost to the economy.
The forecast came as the OECD left its economic growth predictions for Britain unchanged at 1.6 percent in 2017 and one percent next year.
