Whatâs Going On Here?Data out on Wednesday showed UK prices rose by the most in a decade last month, so this could end being Britsâ most expensive Christmas by far-la-la-la-la-la-la-la. What Does This Mean?British consumer prices rose by a higher-than-expected 5.1% last month compared to the same time last year â a hefty increase from Octoberâs 4.2%, and well above the Bank of Englandâs (BoEâs) prediction of 4.5%. Itâd be easy to blame fuel costs, which rose a massive 30% to hit a record high. But prices were on the up across the board: clothing by 4%, furniture by 12%, and second-hand cars by a massive 27%. Put those all together, and core inflation â a measure that removes volatile prices like food and, yep, fuel â rose 4% versus the same time a year ago. Thatâs its biggest jump since 1992, which makes you wonder what Jazzy Jeff makes of all this⊠Why Should I Care?The bigger picture: Donât forget about you-know-what.
This data would normally have been enough to convince the Bank of England (BoE) to raise interest rates when it meets on Thursday â especially combined with the latest strong jobs update. But there arenât normal times, in case youâd forgotten: Omicron has prompted the UK government to take new, potentially economy-bruising restrictions ahead of the holidays, and investors now reckon the BoE will put off raising rates till February (tweet this).
Zooming out: China wants to get back on track.
Price rises may have been much milder in China, but the countryâs economic growth is still slowing down. Thereâs a couple of culprits: Chinaâs crackdown on the property market sent residential sales down by around 20% last month versus the same time last year, while Covid-shy shoppers just havenât been buying as much. Thatâs got the government's attention: itâs already planning to boost economic support early next year to stabilize growth, and economists reckon even more could follow. | 