The Bank of England, which held interest rates at 0.25% last week, expects inflation, as measured by the consumer prices index (CPI), to hit 3% by October, a full percentage point above its target of 2%.
In its quarterly inflation report, the Bank said CPI rose from 2.3% to 2.6% in the three months to June.
Wage growth this year is expected to be only 2%. Poor wage growth led the Bank to revise its economic growth forecast for 2017 from 1.9% in May to 1.7% in June.
Bumper crop of matured mortgages
More than £35bn of home loans are due to mature in September and October, the largest amount since 2012, according to the CACI Mortgage Market Database.
Parents battle with childcare website
HM Revenue & Customs apologised for problems with the Childcare Choices website after they left parents struggling to access two new care schemes.
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Slowdown in house prices continues
Annual house price growth fell to 2.9% in July, from 3.1% in June, according to the latest Nationwide house price index report.
House prices increased by just 0.3% between June and July, meaning the housing market has flattened out.
The average house price rose only a little between June and July, from £211,301 to £211,671. In June, the number of house purchases fell to an eight-month low, with mortgage approvals at a nine-month low of about 65,000.
“The Bank of England’s failure to act on record low interest rates is tantamount to daylight robbery”
Richard Theo, chief executive of savings manager Wealthify
‘Harm’ inquiry into car credit schemes
The Financial Conduct Authority announced last week that it was looking into car finance schemes to decide whether they “cause harm to consumers”.
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The watchdog, which is working with the Bank of England on the issue, said it would assess the sales processes of companies that offer the schemes.
It added that it would “clarify” its rules on checking that customers could afford consumer credit products as there was “some uncertainty in parts of the market”.
How the Footsie has performed
The FTSE 100 index closed up 144 points at 7,512 on Friday, following a week in which the Bank of England deputy, Ben Broadbent, warned interest rates could rise due to Brexit
+11.5% over a year (up 15.3% with dividends)
+12.5% over three years (up 25.6% with dividends)
+29.8% over five years (up 55.8% with dividends)
+20.7% over ten years (up 74.9% with dividends)
Inflation: In June, CPI was 2.6% and RPI was 3.5%
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