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One of the leading indicators Bank of England (BoE) uses to predict the future direction of goods inflation is the manufacturing producer price index (PPI) growth rate. The close relation, however, has broken down in the past year.
Bank of England on Thursday decided to raise its benchmark interest rate by 0.5% to 5%, larger than the market expectation of a 0.25% increase. The decision followed Office of Nation Statistics' publication of a 8.7% CPI inflation reading for the year to May on Wednesday.
Bank of England will conduct a system-wide exploratory scenario (SWES) exercise on the UK financial markets to see how well both banks and non-bank financial institutions can handle stress market conditions.
The headline CPI figure slowed down to 8.7% in April, from 10.1% in March, while core inflation accelerated to 6.8%, from 6.2%
The UK CPI rose 10.1% in the year to March, still remain in double digits even though analysts expected the annual rate to fall to 9.8%
The financial market expecting the UK policy interest rate UK will break 4% by May, more than double the current level of 1.75%. Financial Times reported.
Last week, Bank of England's Deputy Governor for Monetary Policy Ben Broadbent gave an insightful speech about debt dynamics.An important point Broadbent has...