Low sterling 'puts pressure on UK inflation'

Sterling's depreciation has put pressure on inflation in the UK, according to the latest report from the Bank of England.

As sterling fell against the currencies of many of Britain's trade partners, the cost of importing items to the UK rose accordingly.

According the Bank, this meant that many companies tried to offset the high import costs by cutting wages and so contributing to the higher than expected rate of inflation.

However, British expatriates still looking for business opportunities with the UK may find that the currency exchange rate allows them to purchase larger amounts of goods and services than they could previous afford when sterling was high.

This trend has already been seen in a rise in demand from abroad for British goods.

Inflation in the UK rose to 2.9 per cent in December - a sharp increase from the 1.1 per cent that was recorded three months earlier.

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Posted by Chris Barber