Inflation drops in Surprise Fall

The video discusses the unexpected drop in the UK's Consumer Price Index (CPI) from 4.4% to 4%, contrary to analysts' expectations. It explores the history of interest rate changes by the Bank of England since 2007 and the current economic conditions, including stagnant wages and a fragile recovery. The video also examines the pressures on the Bank of England to raise interest rates and the implications of maintaining low rates to stimulate growth and exports. Despite the temporary relief from lower inflation, interest rates are expected to rise eventually.

What was the unexpected change in the Consumer Price Index (CPI) that surprised analysts?

• It rose to 6%

• It remained constant at 4.4%

• It fell from 4.4% to 4%

• It rose to 5%

When was the last time the Bank of England increased interest rates before the significant reduction?

• January 2009

• July 2007

• October 2008

• March 2008

What was the emergency interest rate set by the Bank of England after the reduction period?

• 1.5%

• 0.5%

• 0.75%

• 1%

Why is the Bank of England under pressure to keep interest rates low?

• To reduce government debt

• To increase inflation

• To decrease the CPI further

• To stimulate business growth and encourage exports

What is the current state of inflation compared to the government's target?

• It is below the target

• It is twice the target

• It matches the target

• It is three times the target