Dimanche, 17 Décembre 2017
Latest news
Main » Inflation hits highest level in over three years

Inflation hits highest level in over three years

17 Mai 2017

Chris Williamson at IHS Markit pointed out that the pay data come hot on the heels of Tuesday's news that inflation has spiked to 2.7%, "meaning real pay is falling at the steepest rate for two-and-a-half years".

Analysts had expected inflation to increase to 2.6 per cent.

And budget airline Easyjet posted a £236m loss for the six months to the end of March compared to £18m in the same period past year.

"Nonetheless, with the United Kingdom economy entering a weaker period as inflation continues to bite, more must be done to support growth and investment, including addressing the mounting burden of up-front taxes and costs faced by firms". One-off effects aside, some see more inflation ahead.

It comes after March's figure had remained flat month on month, at 2.3 per cent, after a later-than-normal Easter meant a subdued impact from rising airfares.

Core inflation, which excludes regulated prices - including those in the energy sector - rose to 1.5% in April.

Own an innovative start-up?

On this basis, the highest rise in prices were dominated by food items including coffee, tea and cocoa, potato, yam and tubers, bread and cereals, milk cheese and eggs and meat and fish.

Inflation has climbed from just 0.3 percent a year ago, thanks to the sharp fall in the pound since the June Brexit vote pushing up import prices.

Average earnings increased by 2.4% in the year to March, just 0.1% up on the previous month and below the latest CPI inflation rate of 2.7%. The number of women aged between 16-64 also increased to a record high of 70.2 per cent - an upward trend the ONS attributed, in part, to changes to the state pension age for women, which has resulted in fewer women retiring when they reached 60.

With wage growth lagging behind - tomorrow's figures are expected to show take home pay increasing at 2.4% - it looks like households are now starting to feel the pinch, with GDP growth slowing to 0.3% in the first quarter of this year.

Despite the price hikes, the cost of gas dropped by 0.6% over the period.

The average price of 1 litre of RON95 petrol was RM2.21 in April 2017, compared to RM1.70 in April 2016. CPIH is the ONS's preferred measure of inflation, which includes costs associated with living in, maintaining and owning a home.

Ben Brettell, senior economist at Hargreaves Lansdown commented, 'But despite elevated inflation, those hoping for higher interest rates are likely to be in for a long wait.

Inflation hits highest level in over three years