Britain’s annual inflation rate hit a two-year high in January, official data showed Tuesday, as China and Spain also announced soaring consumer prices as a result of surging food and oil costs.
Analysts said higher prices would put pressure on central banks to raise interest rates although they will be cautious not to overdo it given the need to preserve and bolster economic recovery. British consumer price index (CPI) inflation jumped to 4.0 percent, the highest level since November 2008. That followed 3.7 percent in December but undershot market expectations of 4.2 percent.
In Asia, China said Tuesday that its inflation rate hit 4.9 percent last month, running close to a two-year high and sparking renewed speculation of more monetary tightening from Beijing. Rocketing Chinese inflation comes despite three interest rate hikes in four months and several increases in the amount of money banks must keep in reserve to cut lending.