Where is UK's Inflation Rate Going?

Historical & Current Inflation Rate of United Kingdom

This page will focus on inflation related issue in the United Kingdom (UK).

Some of the featured issues are UK's growing budget deficit, the weaker sterling pound currency, and external sources of inflation.

The latest figures from Jan 2011 put its inflation rate at about 4%. This is compared to the average inflation rate of 2.7% for the period of 1990 to 2010. The historical high was 8.5% in 1991, with the recent high of 5.2% experienced during the later part of 2008.

External Influencing Factors & Foreign Currency Exchange Rates

There are strong forces at work on the global economic front. There is the upward revision of global growth as most countries recover from the remnant effects of the financial crisis.

UK's currency the Sterling Pound have also been experiencing a faster than normal depreciation from 2007 to 2009 which contributed to the higher than targeted inflation rate.

There have been some calls to strength the sterling pound to control the persistent rise of UK prices. However the exact implementation might be difficult if the UK budget deficit continues to be finance mainly through government borrowings. These conflicting requirements would need to resolve to UK inflation & economic woes. 

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