Inflation Shock: Rate More Than Doubles in April

Share On Facebook
share on Linkedin
Print

The annual UK inflation rate more than doubled to 1.5% in April, as prices were driven higher by a rise in energy costs as well as clothing prices.

©

April saw a 9.2% increase in the gas and electricity price cap, and a 13.6% jump in motor fuel prices, which are now at their highest level since January 2020. Clothing also saw a price increase as retailers reversed the aggressive discounting seen during lockdown.

Food prices also rose 0.9% in April with chocolate and ice cream prices increasing.

ONS Chief Economist Grant Fitzner said the rise was “Mainly due to prices rising this year compared with the falls seen at the start of the pandemic this time last year.”

Hannah Audino, economist at PwC, says she expects inflation to continue to rise as lockdown restrictions are eased, and that the reopening of the economy will allow “consumers to unleash some of their excess savings.”

However, Ruth Gregory, senior UK economist at Capital economics, says this burst of inflation will be temporary because it was in part due to the effects of energy price rises which should go into reverse next year.

This increase pushes inflation close to the Bank of England’s target of 2%, and economists are forecasting further increases when they next update is delivered in June because prices for air travel and package holidays will rise as consumer demand rebounds.

The inflation news caused a fall in the FTSE 100 this morning, which was down 0.9% at 6,969.65 because of fears of monetary policy tightening by the Bank of England.

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20211027 12:41:50