City sniffs a rate rise as factory costs go up rapidly

City sniffs a rate rise as factory costs go up rapidly
Larry Elliott, economics editor
Tuesday February 15, 2005

Sterling rose sharply on the foreign exchanges yesterday as the City reacted to surging fuel and raw material costs for Britain’s manufacturers by shortening the odds on an increase in base rates over the coming months.

At the start of a week that will give the markets a clearer view of the inflation outlook for the economy, yesterday’s data showed that the 40% jump in the price of crude over the past 12 months had left industry’s basic costs rising at their fastest rate in four and a half years.

The Guardian