United Kingdom: Inflation remains above the BoE's target in March
April 11, 2017
Consumer prices in the UK rose 0.4% in March compared to the prior month, down from February’s 0.7%. March’s uptick was driven by higher prices for alcoholic beverages and tobacco, clothing and footwear and furniture, household equipment and maintenance.
Inflation remained at 2.3% in March, the highest rate since September 2013 and bang in line with analysts’ expectations. Inflation had been rising steadily since the back end of 2015, but has shot up in recent months largely due to the depreciation of sterling, and now stands above the Bank of England’s 2.0% target rate. Coupled with recent figures showing sluggish nominal wage growth, high inflation is set to eat into consumers’ purchasing power. Annual average inflation picked up from 1.0% in February to 1.1% in March.
Author: Oliver Reynolds, Economist