UK inflation topped the 10 per cent level for the second time this year as households remain under pressure from the cost-of-living crisis.
The consumer price index rose by 10.1 per cent on an annual basis in September, according to estimates published on Wednesday by the Office for National Statistics, just exceeding a consensus forecast among economists that predicted an increase of 10 per cent. The September figure matches the previous high reached in July.
The latest official figures come as new Chancellor Jeremy Hunt attempts to tackle the rising cost of living, as well as the recent turmoil on financial markets sparked by his predecessor’s mini budget.
In the meantime, a report published last week by the Census Bureau showed that the US housing market is feeling the impact of rising interest rates as housing starts fell faster than expected in September, the Census Bureau reported on Wednesday.
Privately owned housing starts in the US numbered 1,439,000 in September, a fall of 8.1 per cent compared to the prior month according to the report. Compared to the same period last year, housing starts were down 7.7 per cent.
“While single-unit starts have collapsed under the weight of higher mortgage rates, rental demand continues to be very strong,” economists at Jefferies wrote. “Double-digit rent increases create a strong incentive to build more multi-family units, even as financing costs have risen.”
Finally, in China, the People’s Bank of China (PBOC) kept its main lending rates unchanged for the second month in a row, as the yuan’s weakness limited the central bank’s room for manoeuvre.
The PBOC kept the one-year loan prime rate at 3.65 per cent and the five-year rate at 4.3 per cent, both unchanged from last month, according to a statement published on its website. The central bank last cut the benchmark interest rate in August.
China’s current interest rates are “reasonable” and provide room for future policy action, the PBOC said, adding to expectations it may resume lowering rates in coming months.
This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap.371 of the Laws of Malta) and the Investment Services Act (Cap.370 of the Laws of Malta).