How the outside world is putting up UK prices – Telegraph.co.uk

That hints at dissatisfaction with the cause of this bout of inflation.

Back in 2013 when Mr Carney came to Threadneedle Street, he said interest rates would stay at rock bottom until unemployment fell to below 7pc. The idea was that rising demand in the economy would push prices up and bring inflation to 2pc, allowing an interest rate hike.

That has not happened, however, and as unemployment fell to below 6pc and then below 5pc but inflation stayed grounded, the Bank of England’s focus shifted to wages. A rise in wages should be an indicator of inflationary pressure. Yet growth has remained muted.

The economy has been growing at a respectable pace, but the rise in inflation has not been driven by any improvement in the UK economy. Instead, two international factors have kicked in.

The first is the oil price. A year ago, drivers were revelling in plunging petrol prices – but the global market stopped falling and so prices at the pump have risen on the year for the first time since mid-2013. Fuel prices are up 1.4pc on the year, removing what had been something of a windfall gain for motorists and the wider economy.

How the outside world is putting up UK prices – Telegraph.co.uk

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