British inflation soars to six-year high

British inflation has hit its highest level in almost six years when it hit 3.1 percent in November. (AFP)
Updated 12 December 2017
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British inflation soars to six-year high

LONDON: British inflation has hit its highest level in almost six years, official data showed Tuesday, forcing Bank of England governor Mark Carney to explain the rise in an exceptional letter.
The Consumer Price Index climbed to 3.1 percent on a 12-month basis in November compared to 3.0 percent in October, the Office for National Statistics (ONS) said in a statement.
Analysts’ consensus forecast had been for no change to the CPI reading.
Carney must send a letter to British finance minister Philip Hammond, explaining why inflation overshot the Bank of England’s 2.0-percent target rate by more than one percentage point.
The open letter, which must outline what action the BoE’s Monetary Policy Committee is taking to return inflation to target, will be published by the bank in February.
Such a letter was last published a year ago, after inflation fell by more than one percentage point below target in October 2016.
The headline measure for November this year was spurred on by the high price of air fares, recreational goods and the rising cost of food and non-alcoholic drinks, the ONS said.
It said that rising prices of computer games had a notable upward effect and higher transport prices were fueled by the rise in Brent oil prices and a falling pound.
“Christmas dinner is going to be a lot more expensive this year,” said Frances O’Grady, head of the TUC umbrella body for unions. “Food prices have gone up at twice the rate of wages.”
Average wage growth continues to lag behind the rise in prices, meaning that real pay packets are falling.
Financial Secretary to the Treasury, Mel Stride said she recognized families were “feeling the squeeze.”
“We are determined to help,” she added, pointing to recent pay-boosting measures by the Conservative government of Prime Minister Theresa May.
Last month, the Bank of England increased its main interest rate for the first time since before the financial crisis, in a bid to tackle high inflation caused largely by the pound falling in the wake of Britain’s vote for Brexit.
“While the one rate hike so far was never meant to slay the inflation dragon straight away, (the latest inflation figure) will doubtless come as an unpleasant shock, and a sign that there will be further tough decisions in the months to come,” commented Chris Beauchamp, analyst at online trader IG.
“While inflation is expected to weaken in due course, potentially lessening the pressure on the BoE, it could be an anxious time over Christmas,” the expert said.


More Saudi sectors opened to foreign investment

The Cabinet amended the sectors excluded from foreign investment at the meeting chair by King Salman. (SPA)
Updated 24 October 2018
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More Saudi sectors opened to foreign investment

  • The amendment allows foreigners to invest in labor services and jobs, including recruitment offices; audio and video services; road transport services; and brokerage services for real estate

RIYADH: Saudi Arabia will allow foreigners to invest in audiovisual services, land transport and real-estate brokerages, the Cabinet decided on Tuesday.

The Cabinet amended what it described as types of activity that had been previously excluded from foreign investment, after concluding its weekly meeting chaired by King Salman.

The amendment allows foreigners to invest in labor services and jobs, including recruitment offices; audio and video services; road transport services; and brokerage services for real estate.

Meanwhile, about 320 foreign institutions have registered as qualified foreign investors in the Saudi stock market, the exchange’s chairwoman told the Future Investment Initiative in Riyadh.

Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange (Tadawul), said 200 more are expected to register.

Global index provider MSCI classified the Saudi equity market as an emerging market in June, a move expected to attract billions of dollars of passive funds.

Al-Suhaimi said she expected the number of qualified foreign investors to increase before and after the inclusion in the index, which is expected to happen in phases coinciding with index reviews in May and August 2019.