U.K. February Inflation accelerates in 9 Months
U.K. inflation accelerated to the fastest pace in nine months in February and U.K. Manufacturing prices increased twice as much as forecast as energy costs surged. Consumer prices rose 2.8 per cent from a year earlier, compared with 2.7 per cent in January, the Office for National Statistics said today. Producer prices increased 0.8 per cent in February from the previous month, the most since April 2011. Housing, water, electricity and gas added 0.11 percentage point to annual inflation in February; the biggest upward impact. That reflects increases in utility bills, the statistics office said.
Meanwhile, Cyprus’s Parliament is scheduled to vote today on the agreement, which includes a one-time tax on depositors of 5.8 billion euros. Under the March 16 deal account holders with deposits below the insured amount of 100,000 euros will be taxed at 6.75 per cent, while those with more face a 9.9 per cent levy. Those rates will probably be amended to ensure a higher burden falls on those with deposits of more than 100,000 euros, European finance chiefs said in a statement last night. Cyprus’s depositors aren’t covered by deposit guarantee rules because the state is insolvent, German Finance Minister Wolfgang Schaeuble said today. Schaeuble said Germany put pressure on Cyprus to impose the tax in exchange for a 10 billion euro loan.
On the FX markets, EUR/USD stabilised after the fall prompted by the conditions of the Cyprus bailout and was able to push back from a three month low of $1.2880 to a high of $1.2995. Meanwhile, GBP/EUR reached €1.1720 yesterday before easing back below the €1.17 level.