Fineco Worldwide Food and Clothing Lift UK Inflation

Online, February 24, 2011 (Newswire.com) - "Fineco Worldwide" strategist are thought to be expecting interest rates in the United Kingdom to be increased during 2011 as the country's inflation rate continues to defy the Bank of England's efforts to keep it contained.

Price increases in food and clothing made significant contributions to the increase from 3.2% to 3.3%. One "Fineco Worldwide" analyst said, "It might only be a 0.1% increase but expectations were for a fall or at least an unchanged number. The BoE doesn't really seem to know what to do next."

The UK will begin to feel the pain of austerity measures introduced by its coalition government to help shrink the nation's budget deficit but hopes that any shortfalls in financing that proved too painful could be addressed by a re-launch of the bank's quantitative easing program receded following the inflation number's release.

"Fineco Worldwide" warned that the situation is likely to deteriorate when workers abandon restraint over pay negotiations which has so far meant that consumers are absorbing higher prices.

"People can only tolerate higher and increasing prices for so long before they start asking for more money and with company profits looking healthy, it may be difficult to argue against higher pay," said the "Fineco Worldwide" analyst.