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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/oct/17/uk-inflation-wage-squeeze-mark-carney-bank-of-england-live
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| UK inflation figures to show wage squeeze continues - business live | UK inflation figures to show wage squeeze continues - business live |
| (35 minutes later) | |
| 9.26am BST | |
| 09:26 | |
| A reminder of why today’s inflation reading is particularly important: | |
| Sept inflation data (out in 8mins) is the last month we'll get before the BOE interest rate decision on Nov 2. Unemployment tomorrow. | |
| 9.12am BST | |
| 09:12 | |
| Analysts at HSBC reckon the UK’s inflation rate jumped to 3.1% last month: | |
| HSBC on UK CPI: We look for 3.1% YY, supported by electricity & petrol prices, Ryanair cancellations and FX passthrough effects | |
| 9.07am BST | |
| 09:07 | |
| Yikes! Shares in entertainment group Merlin have slumped by 20% in early trading. | |
| Merlin has shocked the City by warning it suffered “difficult trading conditions” over the summer. | |
| The company, which runs Alton Towers, Madame Tussauds and the London Eye, said terrorism was partly to blame: | |
| The spate of terror attacks witnessed in the UK marked an inflection point in Midway London and UK theme park trading. | |
| Poor weather in Northern Europe and extreme weather in Italy and Florida also impacted peak season trading. | |
| Shares in Madame Tussauds owner Merlin Entertainments down 18% after warning that terror attacks hit attractions ... pic.twitter.com/kjaaN1dE1U | |
| 9.03am BST | |
| 09:03 | |
| Economist Rupert Seggins has tweeted some handy graphs on UK inflation, ahead of this morning’s data in 30 minutes time. | |
| 1. UK inflation figures for September out today - consensus is for 3%y/y rise in average prices (CPI). pic.twitter.com/Rp5np9GHoO | |
| This one shows how inflation typically tracks moves in the value of the pound (but roughly two years later) | |
| 2.Sterling's still not done with core prices. Means a higher starting point for any further food/energy price rises to hit overall inflation pic.twitter.com/0meIxSaOXp | |
| This chart shows how the oil price influences the cost of living: | |
| 5. Changes in the oil price suggest that UK transport price inflation likely ticked up a bit in September. pic.twitter.com/kvNLH7YE4Z | |
| 8.59am BST | |
| 08:59 | |
| Pound rises ahead of UK inflation figures | |
| Sterling is inching higher this morning, as City traders anticipate UK inflation hitting its highest levels since 2012. | |
| The pound has gained almost half a eurocent against the euro, to €1.2175. It’s also up a more modest 0.1% against the US dollar, at $1.3263. | |
| Connor Campbell of SpreadEx explains: | |
| Despite last night’s meeting between Theresa May and Jean Claude Juncker (and David Davis and Michel Barnier) producing nothing more than vague promise to ‘accelerate’ negotiations, the pound is on the rise this Tuesday. | |
| That’s because investors are eagerly awaiting September’s inflation reading, which is set to see the consumer price index finally hit a 5 year high of 3.0%. Such a reading would put even more pressure on the Bank of England to raise rates, though that hawkish urge may be tempered by the continued fall in real wages (set to be confirmed tomorrow) and a sharp month-on-month drop in retail sales (coming on Thursday). | |
| 8.44am BST | 8.44am BST |
| 08:44 | 08:44 |
| Two years ago, CPI inflation was actually negative, at -0.1%. | Two years ago, CPI inflation was actually negative, at -0.1%. |
| That was partly to falling oil prices, which delivered cheaper petrol, and price wars between UK supermarkets. | That was partly to falling oil prices, which delivered cheaper petrol, and price wars between UK supermarkets. |
| But, as this chart shows, the inflation rate inched higher in late 2015 and early 2016 - and then accelerated sharply once the pound slumped after the Brexit vote. | But, as this chart shows, the inflation rate inched higher in late 2015 and early 2016 - and then accelerated sharply once the pound slumped after the Brexit vote. |
| 8.39am BST | 8.39am BST |
| 08:39 | 08:39 |
| Higher petrol prices and utility bills probably drove UK inflation up in September. | Higher petrol prices and utility bills probably drove UK inflation up in September. |
| Airline ticket prices could also push the consumer prices index up to 3%. That’s partly Ryanair’s fault; customers scrambled to buy new flights after it cancelled thousands of trips last month. | Airline ticket prices could also push the consumer prices index up to 3%. That’s partly Ryanair’s fault; customers scrambled to buy new flights after it cancelled thousands of trips last month. |
| Food, clothing and footwear are all ‘wild cards’ that could push inflation over 3%, says Marc Ostwald of ADM Investor Services. | Food, clothing and footwear are all ‘wild cards’ that could push inflation over 3%, says Marc Ostwald of ADM Investor Services. |
| 8.07am BST | 8.07am BST |
| 08:07 | 08:07 |
| The agenda: UK inflation figures | The agenda: UK inflation figures |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Britain’s inflation rate could hit a new five-year high this morning, hitting people in the pocket and putting more pressure on the Bank of England to raise interest rates in November. | Britain’s inflation rate could hit a new five-year high this morning, hitting people in the pocket and putting more pressure on the Bank of England to raise interest rates in November. |
| City economists predict that inflation, based on the Consumer Price Index, jumped to 3.0% in September. That would be an increase on August’s 2.9%, and the highest level since spring 2012. | City economists predict that inflation, based on the Consumer Price Index, jumped to 3.0% in September. That would be an increase on August’s 2.9%, and the highest level since spring 2012. |
| If so, this would be the latest proof that the fall in the pound since last year’s Brexit vote is pushing up prices and hurting households and businesses. | If so, this would be the latest proof that the fall in the pound since last year’s Brexit vote is pushing up prices and hurting households and businesses. |
| It would also mean that prices are rising faster than earnings. The average pay packet only grew by 2.1% over the last year, meaning that real wages are falling. | It would also mean that prices are rising faster than earnings. The average pay packet only grew by 2.1% over the last year, meaning that real wages are falling. |
| Finn McLaughlin of Capital Economics says: | Finn McLaughlin of Capital Economics says: |
| We expect that CPI inflation (09.30 BST) rose from 2.9% in August to 3% in September, intensifying the real wage squeeze. That said, we suspect inflation is now not far from its eventual peak. | We expect that CPI inflation (09.30 BST) rose from 2.9% in August to 3% in September, intensifying the real wage squeeze. That said, we suspect inflation is now not far from its eventual peak. |
| We think that it will rise to about 3.2% before year-end. | We think that it will rise to about 3.2% before year-end. |
| UK Inflation set to rise above 3% this year and fall back to the @bankofengland 2% target by end of 2018 #EYITEM https://t.co/tPEpZluLOm pic.twitter.com/RqxGmj5SMX | UK Inflation set to rise above 3% this year and fall back to the @bankofengland 2% target by end of 2018 #EYITEM https://t.co/tPEpZluLOm pic.twitter.com/RqxGmj5SMX |
| UK CPI inflation likely to be 3pc or above in today's release for the first time since Spring 2012. Another good reason for Nov rate rise. | UK CPI inflation likely to be 3pc or above in today's release for the first time since Spring 2012. Another good reason for Nov rate rise. |
| Today’s inflation figures are particularly important as they’ll be used to set next year’s pensions rises (under the UK’s ‘triple lock’, pensions rise in line with wages, prices, or 2.5% - whichever is higher). | Today’s inflation figures are particularly important as they’ll be used to set next year’s pensions rises (under the UK’s ‘triple lock’, pensions rise in line with wages, prices, or 2.5% - whichever is higher). |
| The retail prices index, another measure of inflation, will be used to set next year’s business rates. It is expected to rise to 4% today, which would mean a 4% rise in business rates for UK firms. | The retail prices index, another measure of inflation, will be used to set next year’s business rates. It is expected to rise to 4% today, which would mean a 4% rise in business rates for UK firms. |
| If CPI rises by 3.1% or more, then the Bank of England will have to write to the government explaining why it’s not keeping inflation close to its 2% target. | If CPI rises by 3.1% or more, then the Bank of England will have to write to the government explaining why it’s not keeping inflation close to its 2% target. |
| With excellent timing, BoE governor Mark Carney and colleagues are testifying to MPs on the Treasury this morning, so we’ll see what they say about inflation, Brexit, and the state of the economy. | With excellent timing, BoE governor Mark Carney and colleagues are testifying to MPs on the Treasury this morning, so we’ll see what they say about inflation, Brexit, and the state of the economy. |
| Also coming up today: | Also coming up today: |
| The row between aircraft makers Boeing and Bombardier has taken a dramatic turn overnight; Airbus, the European consortium, is taking a controlling stake in Bombardier’s C Series business. | The row between aircraft makers Boeing and Bombardier has taken a dramatic turn overnight; Airbus, the European consortium, is taking a controlling stake in Bombardier’s C Series business. |
| That division, which employs thousands in Northern Ireland, was hit with US tariffs totalling 300% last month following a complaint from Boeing. | That division, which employs thousands in Northern Ireland, was hit with US tariffs totalling 300% last month following a complaint from Boeing. |
| Could this deal protect jobs? We’ll bring you more details as they come in | Could this deal protect jobs? We’ll bring you more details as they come in |
| Theme park operator Merlin Entertainment, online fashion retailer ASOS and model toy maker Hornby are all reporting results this morning too. | Theme park operator Merlin Entertainment, online fashion retailer ASOS and model toy maker Hornby are all reporting results this morning too. |
| Here’s the agenda | Here’s the agenda |
| 9.15am BST: Treasury committee question Bank of England deputy governor Sir Dave Ramsden, and new MPC member Silvana Tenreyro | 9.15am BST: Treasury committee question Bank of England deputy governor Sir Dave Ramsden, and new MPC member Silvana Tenreyro |
| 9.30am BST: UK inflation figures for September | 9.30am BST: UK inflation figures for September |
| 9.30am BST: UK house price figures for August | 9.30am BST: UK house price figures for August |
| 10am BST: Eurozone inflation figures for September | 10am BST: Eurozone inflation figures for September |
| 11.15am BST: Mark Carney testifies to the Treasury Committee | 11.15am BST: Mark Carney testifies to the Treasury Committee |
| Updated | Updated |
| at 8.24am BST | at 8.24am BST |