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Business

Sterling slide set to bite UK consumers

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Opening sequence

Business

Sterling slide set to bite UK consumers

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COMING UP:Sterling slide set to bite UK consumers

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00:00:01
>> That new iPhone you want. In the UK, it's £60 dearer than last year, up about 11%. Coincidentally or not, that's almost exactly how much value sterling has lost since the vote for Brexit, a drop that got sharper overnight when the pound tumbled in Asian trade. The slide is already making imports more expensive and could prompt many retailers to raise prices.
00:00:26
Clothing chain Next for one says it expects to lift its prices by about 5% next year. Reuters' UK chief economics correspondent Bill Schomberg says the evidence isn't quite in yet though.>> Where we have seen it is in what people call the producer prices. That's the prices that factories pay for the goods that they buy to make things.
00:00:47
And so there are signs that there's inflation in the pipeline but so far it hasn't come through. People are expecting to see clearer signs of it around the turn of the year.>> It was a wild ride for sterling overnight. At one point it was down below 115 against the dollar though it later recovered.
00:01:04
Some blaming a so-called fat finger, a keyboard slip by a trader somewhere in Asia. But sentiment on the currency is certainly jittery.>> The pound has fallen quite strongly as investors read the signals from that. Teresa May's speeches in Birmingham that the Conservative Party conference is a sign that the country really is heading for what people call a hard Brexit that means an agreement so with the EU that really is quite limited.
00:01:32
>> All this is a headache for the Bank of England. It had hinted at another rate cut in November. But rising inflation and the fall in currency would traditionally call for a rate hike. Bank Governor Mark Carney has some hard thinking to do.