Lettuce link to US inflation rate
Saturday 13 May 1995
Flashing the second inflation danger signal this week, yesterday's figures meant a further retreat of lingering hopes that the Federal Reserve might cut interest rates later this month, and helped send the dollar soaring.
Floods in California in March affected food prices last month. Apart from lettuces, other fresh vegetables cost 13.6 per cent more. Food prices overall increased 0.7 per cent.
More worrying was a 0.4 per cent increase in ''core'' prices excluding food and energy. There were sizeable increases across a wide range of goods and services including transport, housing, medical care and entertainment.
The headline rate of inflation has now reached 3.1 per cent, compared with 2.4 per cent a year ago. Kevin Flanagan, an economist at Dean Witter Reynolds in New York, said signs of inflation pressure are being passed on to consumers.
The shift in Wall Street views on interest rates was one factor contributing to the dollar's strength yesterday. By noon in New York, the currency was trading at DM1.4450 and Yen86.73, down from its earlier highs but well above its opening levels of DM1.4130 and Yen 85.35.
Keith Edmonds, chief analyst at IBJ International, said: ''Apart from the signs that the American economy is not slowing that rapidly and inflation could be a worry, the dollar is being supported by signs of progress on the Federal budget deficit.''
Other analysts cited the prospect of US trade sanctions against Japan as a reason for dollar strength. Gerard Lyons of DKB International said: ''Some people see it as a switch of tactics, from talking down the dollar to trade sanctions.''
- 1 Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 How the language you speak changes your view of the world
- 4 The top 50 cities for young people to live in
- 5 Uploading pictures to find out how old you are gives Microsoft the right to post them wherever they want
General Election 2015: Fishing is on Nigel Farage's mind as he casts a line to the disaffected of Grimsby
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
The man who filmed the Freddie Gray video has been arrested at gunpoint
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...