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In the midst of a worldwide recession Britain's CPI (consumer price index) rose 3.2% in February. This is not supposed to happen. In normal circumstances consumer prices usually drop or remain steady during a recession. The Office of National Statistics in Britain said that the increase in the CPI was due to an increase in food prices.

Now all of the pundits are scrambling for an explanation. Mervyn King, governor of the Bank of England, blames it on the depreciation in the British pound. Since the summer of 2007, the pound has fallen 28%. Mr. King tried to soothe investors by saying that he expects inflation to fall to the government's target of 2% later this year.

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Why is a jump in Britain's CPI of 3.2% so important? originally appeared on BloggingStocks on Wed, 25 Mar 2009 15:00:00 EST. Please see our terms for use of feeds.

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