UK inflation hits 3-year high in September

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UK inflation hits 3-year high in September

UK inflation hits 3-year high in September
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Inflation in Britain was the highest in three years in September driven up by soaring gas and electricity bills.

Consumer prices were up 0.6 percent month on month, making the annual inflation rate 5.2 percent.

Britons’ living standards are falling as wages fail to keep up with rising prices.

The UK central bank’s decision to revive the faltering economic recovery by printing more money won’t help.

The fresh round of quantitative easing could add to inflation which is already way above the Bank’s two percent target.

The central bank expects inflation to drop sharply next year when one-offs, like this year’s value-added tax rise fall out of the equation and the weak economy dampens wage and price increases.

The retail price inflation gauge, which includes more housing costs and is the benchmark for many wage deals, rose 5.6 percent year-on-year, its highest level since June 1991.

Bills for gas, electricity and other fuels rose 18.3 percent on the year in September, while transport costs were up 12.8 percent. Food prices were six percent higher than last year.

Last week, Bank of England chief economist Spencer Dale said inflation was likely to have exceeded 5 percent in September, but should fall sharply early next year and continue to ease during 2012.

The Bank has launched a second round of quantitative easing, pumping 75 billion pound into the economy, as it worries about the weak economy.