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British inflation jumps to 3.0 percent |
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News |
May 17, 2000
LONDON, MAY 16 (AP) - Higher monthly mortgage costs boosted Britain's inflation rate to 3.0 percent in April, up from 2.6 percent the previous month, the government said Tuesday.
However, underlying inflation, which excludes mortgage interest payments, fell to 1.9 percent - its lowest level since the Office for National Statistics began tracking monthly inflation 25 years ago.
The diverging trends illustrate the challenge that the Bank of England faces in setting key interest rates each month in an effort to control inflation and help regulate economic growth.
Inflation, left uncontrolled, endangers growth by eating away at the value of savings and investments and fueling employee demands for higher wages, which in turn can lead to still higher inflation.
Annual underlying inflation eased last month from 2.0 percent in March, the statistics office said. April's underlying inflation figure is the lowest since at least January 1975, when the government started keeping records.
The Labor Party government quotes the underlying rate as the benchmark for its efforts to control inflation. The underlying rate for April was well below the government's annual target of 2.5 percent. |