Inflation figures in the UK have stabilized at 3% in October, their highest level since April 2012. This was against all expectations, especially those of the Bank of England, which indicated that inflation could hit a new high before it starts to slow down. Most expectations were that the CPI would rise to 3.1% from September's 3%.
The Bank of England, which raised interest rates for the first time in the last 10 years, at its last meeting said that inflation could reach its peak in October before falling slightly above the target of 2%.
The figures reinforce doubts about the Bank of England's decision to raise interest rates as the economy slows and uncertainty surrounds the process of Brexit negotiations with the EU. The rise in inflation is due to the depreciation of the pound since the vote in Britain's EU membership referendum, which has clearly reflected on import prices, which reached their highest levels.
On the other hand, the euro benefited from positive figures from the German economy, with GDP growing by 0.8% in the third quarter better than expected, and on an annualized basis the German economy grew by 2.8%, the fastest growth in Germany since the first quarter of 2011.
The eurozone continues to move ahead on the path to full economic recovery, with the eurozone economy growing by 0.6% in the third quarter, achieving its best annual performance in 10 years. The European Central Bank's monetary policy helped the region's economy to recover from the economic recession.
The European Central Bank in January will begin reducing the amount of the QE program to 30 billion per month with the extension of the period till the end of 2018, and wants to see more evidence on recovery to start thinking about ending the program fully.
