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Inflation shoots to highest since 2013

• Posted by currencies in Bank of England, Brexit, Budget, Currency, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Prime Minister, Sterling, UK, Uncategorised
• May 16, 2017
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British inflation rose to its highest level since September 2013 last month, according to official data released half hour ago – that underlined a growing squeeze on households ahead of the June 8 national election.

Consumer prices increased in April by 2.7 percent compared with a year earlier, the Office for National Statistics said, slightly above economists’ expectation for a 2.6 percent annual rise in a poll.

Inflation has accelerated in Britain in recent months, pushed up by a weakening of the pound since last year’s decision by voters to leave the European Union, and by the rise in oil prices which has fuelled inflation in other countries too.

Last week Bank of England Governor Mark Carney warned this year would be challenging for consumers, saying that wages are about to fall in real, inflation-adjusted terms.

With little sign of an overheating domestic economy, all but one of the BoE’s eight policymakers voted last week to keep rates on hold.

The latest inflation figures were boosted most of all by rising airfares during the Easter holidays, which were in March last year. Rising clothing prices, higher car tax and electricity also pushed up consumer prices.

Many economists say the impact of the fall in sterling on consumer prices will be felt more strongly in the coming months, and the central bank expects inflation to peak at nearly 3 percent by the end of this year.