Spectre of Inflation Haunts UK and US; Demand for Metals in Developing Countries like China Will Continue to Stoke the Fires of Inflation
Byline: Sam Fleming
A WELTER of grim economic reports on both sides of the Atlantic underlined the mounting threat to Western living standards posed by accelerating inflation.
The Bank of England's new chief economist Spencer Dale warned families will be gripped by a 'squeeze on real incomes' just hours after the Office for National Statistics reported sluggish wage growth and the biggest jump in dole queues since 1992.
UK inflation will rise 'substantially' above the current 3.8pc rate later this year, Dale said in his first public comments since taking up the influential post.
In the US, Wall Street was affected by shock figures showing that consumer price inflation hit 5pc in June, the highest rate since 1991. Petrol prices rose 10pc between May and June alone, the Commerce Department said.
The toxic combination of soaring living costs and a world banking crisis threatens to bring the curtain down on the most powerful global economic boom for nearly four decades.
This is hammering sentiment on stock markets, with the City of London and Wall Street witnessing another day of febrile trading.
The FTSE 100 finished down 21.3 to 5150. …