UK Latest: Higher-Than-Expected Inflation Adds Pressure on BOE to Hike Rates

UK Latest: Higher-Than-Expected Inflation Adds Pressure on BOE to Hike Rates

Assessment

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Business

University

Hard

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The transcript discusses the unexpected rise in core inflation rates, which exceeded both economists' and the Bank of England's forecasts. The analysis highlights the challenges in economic forecasting, particularly the assumption that inflation would decrease as quickly as it rose. The impact of base effects, such as the previous year's energy bill increases, is noted, along with the persistent high food price inflation affecting the poorest. Concerns are raised about core inflation, excluding food and energy, which has risen unexpectedly. This has led to traders adjusting their expectations for peak interest rates.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the actual inflation rate compared to the economists' expectations?

8.7% actual, 8.2% expected

8.4% actual, 10.1% expected

8.2% actual, 8.7% expected

10.1% actual, 8.4% expected

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What assumption did the Bank of England make about inflation?

Inflation would not affect energy prices

Inflation would remain constant

Inflation would fall as fast as it rose

Inflation would rise faster than it falls

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What accounted for the fall in inflation according to the transcript?

Increase in food prices

Decrease in energy bills

Base effects

Improved economic forecasting

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the concern regarding core inflation?

It is unaffected by food prices

It is rising unexpectedly

It is holding steady

It is decreasing rapidly

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the new predicted peak interest rate according to traders?

6.0%

5.5%

4.5%

5.0%