LONDON, Feb 6 - A measure of future British inflation has reached its highest level since March 2001, and points to a continued upturn in British prices, its creators said on Friday. The Economic Cycle Research Institute, which forecasts business cycles using composite indexes of economic indicators, said its UK Future Inflation Gauge rose to 106.5 in December, from 105.8 the previous month. The smooth annualised growth rate in prices rose to 2.2 percent from 1.2 percent.
"The UKFIG remains in a clear uptrend, suggesting that U.K. inflation will keep climbing," ECRI said in a statement. "The UKFIG was pushed up in December by stronger money supply growth, a tighter yield spread, and a higher percentage of purchasing managers reporting slower deliveries, partly offset by slower growth in raw materials prices," ECRI said. The Bank of England's target rate for consumer price inflation is 2.0 percent, which it sees as facilitating stable growth coupled with low unemployment.||