City Expert: Inflation Key to Bank's Decisions

By Michael Ross
Published on 16 May 2008
AddThis Social Bookmark Button
The Bank of England, as well as consumers, is to have trouble with inflation this year according to a City fund manager.

Inflation is to continue hitting Britain's consumers in the pocket and causing damage to economic growth, a top City expert has claimed.

Ted Scott, manager of the popular-with-investors F&C Growth & Income Fund, made the comments following new figures from the Bank of England.

According to the central bank, inflation will rise to 3.7 per cent this year, well above its government-imposed target of two per cent.

Earlier this week, British Gas indicated that it would put its energy tariffs up by ten to 20 per cent due to high wholesale costs.

Crude oil is currently trading for around $120 per barrel, a historic high which, commodities experts have said, is likely to be raised to $200 in months to come.

Mr Scott advised investors that this "inflationary pressure" was likely to have a significant affect on the bank's monetary policy this year.

"The Bank of England is in an awkward situation," the investments expert commented.

"They would like to be in a position to lower interest rates further but so far they have been tentative in their monetary policy by only lowering rates gradually, in contrast with the Federal Reserve [in America] which has been much more aggressive."

The pound's continuing weakening against the Euro and the fact that it has begun to decline against the dollar were also cited by the expert as exacerbating the problem.

"[Bank governor] Mervin King's position is far from easy", Mr Scott concluded.

[Back to top of article]
City Expert: Inflation Key to Bank's Decisions

Add Your Comment

Name: 
Comment: 
You have 1000 characters left.

Latest General Money Articles & News

General Money Articles

Solar Panels in Homes 'A Waste of Money'
Solar Panels in Homes 'A Waste of Money'

The panels only pay back householders in terms of energy bills savings in around 200 years, according to surveyors - who recommended fitting insulation instead.

'Aldi Effect' on the Rise as Austerity Britain Returns
'Aldi Effect' on the Rise as Austerity Britain Returns

Organic food sales have declined - while the cut-price grocer is booming.

Hard-up Brits 'Turn to Haggling'
Hard-Up Brits Turn to Haggling

The credit crunch is causing many to attempt to negotiate discounts for goods and services.

Stamp Duty Axed for a Year as Housing Transactions Plunge
Stamp Duty Axed for a Year as Housing Transactions Plunge

First time buyers and property professionals breathe a sign of relief as stamp duty is suspended for the next 12 months.

Green Revolution 'Hammered by Credit Crunch'
Green Revolution 'Hammered by Credit Crunch'

Many people are no longer willing to pay extra for food to help the environment.

Insurer Warns of Cost-Induced 'Health Crunch'
Insurer Warns of Cost-Induced 'Health Crunch'

Britons' wellbeing is suffering as their personal finances tighten - with many passing up on healthy eating for cheap fast food.

Most are Budgeting in Credit Crunch Britain, Paypal Claims
Most are Budgeting in Credit Crunch Britain, Paypal Claims

One in five of those who make a budget are still dipping in to savings and using credit cards to make ends meet, the research also reveals.

Carer Pay Reform Recommended by MPs' Report
Carer Pay Reform Recommended by MPs' Report

Salary reimbursements might be needed in order to properly pay the carers for their voluntary work, the new document claims.

Popular Related Articles

Solar Panels in Homes 'A Waste of Money'
Solar Panels in Homes 'A Waste of Money'The panels only pay back householders in terms of energy bills savings in around 200 years, according to surveyors - who recommended fitting insulation instead.

Latest Related Headlines

Solar Panels in Homes 'A Waste of Money'
Solar Panels in Homes 'A Waste of Money'The panels only pay back householders in terms of energy bills savings in around 200 years, according to surveyors - who recommended fitting insulation instead.

Other Money Headlines

Paper plane
£5 European FlightsRyanair are celebrating the closure of a competitor airline with a £5 seat sale.
RSS FeedLatest Headlines
Free Services Weekly Money Email
The Week's Biggest Money News and Money Saving Tips sent directly to your inbox...
Enter your email:
Find Companies Money Guides RSS Feeds - Subscribe!
Site Map | Privacy Policy | About Us | Contact Us
money.co.uk is a trading name of Dot Zinc Limited, who are authorised and regulated by the Financial Services Authority. FSA Registration Number: 415689.
Copyright © www.money.co.uk / Dot Zinc Limited 2002-2008. All rights reserved.
Home | Login | Sign Up