Skip to content

UK inflation at highest levels since 2012 as Bank of England chief warns further rises possible

By Ian Molyneaux

PRIME MINISTER Teresa May is facing the unwelcome news that the UK inflation rate is likely to rise again after hitting three per cent this week – the highest level since 2012.

Bank of England governor Mark Carney testified to the Treasury Committee on Tuesday and indicated that it is “more likely than not” to rise a further 0.1 per cent in the coming months.

The further 0.1 per cent would be significant as this would trigger Carney writing to the Chancellor of the Exchequer to explain why the increase has occurred.

The increase in inflation has been linked to the UK’s decision to leave the EU and adds to the series of challenges faced by the Prime Minister in the past three weeks.

On Monday she met with Commission President Jean-Claude Junker and EU chief negotiator Michel Barnier.

The meeting was arranged after negotiations in Europe appeared to stall last week.

At a joint press conference after the talks with the Brexit Secretary David Davies, Junker described the process as reaching a “deadlock”. He also described the inability to reach a consensus over how much the UK pays when it leaves the EU as “disturbing”.

However, European Council president Donald Tusk told reporters at a council summit in Brussels yesterday that there had been progress in talks, even though sufficient progress had not been reached to move to trade negotiations.

European Commission President Jean-Claude Juncker, Britain’s Prime minister Theresa May and Malta’s Prime minister Joseph Muscat attend the second day of the European Council Meeting in Brussels on October 20

The PM was not allowed to negotiate face-to-face with EU leaders on Brexit at the summit, but was permitted to address them over dinner on Thursday evening.

The next round of talks has not yet been scheduled. However both sides have said they aim to make sufficient progress before the European Council summit in December – when leaders will judge whether it is time for trade talks.

In further Brexit developments in recent days a YouGov/Times poll has suggested the public’s appetite for Brexit may be changing.

When 1,680 people were surveyed 47 per cent said in hindsight they felt it was wrong to leave the EU, compared to 42 per cent who said it was right.

YouGov conducts the poll every few weeks and this one represents the largest amount of people so far regretting the decision since the referendum took place.

James McGrory, executive director of Open Britain said: “As the government continues to make a mess of the negotiations, it’s hardly surprising that more and more people are worried about Brexit.

“Leaving the EU is far more complicated and potentially more painful than Leave campaigners or ministers have ever admitted.

“People have every right to keep an open mind about Brexit and make a judgement on whether the deal the government brings back delivers on all the Brexit promises that were made.”

A spokesperson for also responded to the findings saying: “Another YouGov poll back in June found a majority said the government had a duty to honour the public will. Only last week, 74 per cent of respondents to a Sky News poll said they preferred a no deal to a bad deal.

“If we are to draw one conclusion it is that elections matter far more than polls. Members of the government should focus on their democratic obligations rather than impeding the implementation of 2016’s historic referendum result.

“The media is happily acting at Brussels’ bidding by portraying British negotiators as incompetent. Meanwhile, the likes of Phillip Hammond are repeatedly scuppering prospects of a good deal. His refusal to spend relatively small amounts on contingency planning is just one example.”

What do you think?