Financial News
- 18 April 2012, 6:05
UK Inflation: Cost Of Living Rises Again
UK inflation rose to 3.5% last month, piling more pressure on already hard-pressed households.
Higher food and clothing prices pushed up the consumer price index (CPI) rate of inflation by 0.1% in March, from 3.4% in February.
The rise called a halt to a five month run of declines from a peak of 5.2% in September last year.
Families were squeezed by high prices and sluggish wage growth throughout 2011 and some relief from the high cost of living was expected this year.
But Vicky Redwood, chief UK economist at Capital Economics, said the halt in the downward trend "should be only temporary".
She said: "Inflation should start to fall again before long, not least as last year's rises in energy prices continue to fall out of the annual comparison.
"We also expect core price pressures to ease as the economic recovery loses momentum again."
The rise will come as a concern to Bank of England policymakers, who forecast inflation to fall rapidly throughout 2012 and 2013.
It remains well above their target of 2%, reinforcing expectations that the central bank will not inject more cash into the economy next month as part of its quantitative easing programme.
The Office for National Statistics (ONS) said clothing and food prices were the biggest drivers of inflation last month.
Fruit, bread and cereals and meat saw prices rise in March, compared with falls a year ago, which acted as a drag on the overall food category.
Clothing and footwear prices were up 2.2%, driven by women's outerwear.
Despite fuel prices hitting record highs, the ONS said this had no impact on the rise in inflation since petrol and diesel also rose by similar amounts the previous March.
A spokesman for the Treasury said: "Inflation has fallen by a third since September.
"Most market commentators expect inflation to continue falling later this year, providing ongoing relief for family budgets."
The retail price index (RPI), an alternative measure of inflation, dipped slightly to 3.6% in March, from 3.7% the previous month.
what do you think?
herewegoagain10
well, Miss Redwood, price rises may well fall off the end of a 12 month rolling list but it doesn't make them any cheaper. Unless pay and pensions rise by at least the rate of inflation we're all going backwards and getting poorer. The people of Britain are being pushed into a corner and will eventually lash out as any cornered animal will do. Then you'd better look out.
Lee Bennett
well said herewego
Lee Bennett
what on earth are they on about inflation falls because it drops out of the annual comparison ,and thats supposed to help me pay a three hundred quid gas bill after a mild winter ! clueless people.The man on the street knows he is being had over big,big time and doesn't need muppets spouting made up figures.No wonder the tories are 11 points behind :)
Vomit Bastard
Hmm, so fuel goes up and that increase gets past on down the chain from tractor in the field to you buying the produce in the supermarket, every movement of goods costs fuel and producers are increasing their prices to cover it and probably a little more just to be sure. Everything in any shop has fuel involved to transport it whole or in part and every time that goes up so will everything we buy, and as the ticket prices goes up so does the amount of vat we pay increase, so its a loose loose and get screwed some more.
Lee Bennett
well said
Grant Berry
o.1%................so what?
Jonathan Goodwin-Self
12:10pm on 17/4/2012
so food prices increase by 10%. clothing by 20%. Petrol and diesel by 5%. Airline flights by 20%. Mortgages by 10%. In fact all prices increased by a minimum of 10%, but the ONS says inflation is up by 0.1% band says that petrol and diesel is now not on the inflation target nor are mortgages and loans and credit cards or overdrafts. The ONS are telling extreme lies