UK Treasury: Dec CPI Reflects One-Off Factors Including VAT

LONDON (MNI) – The rise in UK inflation in December reflects
one-off factors, including global commodity prices which in turn are
being pressured by the rebound in the world economy, according to the UK
Treasury.

December CPI came in at 3.7%, well above analysts’ median forecast
of 3.4% and up from 3.3% in November. The Bank of England’s Monetary
Policy Committee is facing calls to tighten policy due to the rising
inflation.

A Treasury statement said “Monetary policy is a matter for the Bank
of England. As the Bank has explained, the current levels of inflation
reflect one-off impacts such as last year’s rise in VAT in January 2010,
and rises in global commodity prices related to the fast-growing world
economy.”

In an interview published earlier Tuesday BOE Executive Director
Markets Paul Fisher said the current high inflation was “very
uncomfortable” for the MPC.

–London newsroom: 0044 20 7862 7491; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,M$$BE$]