The Bank of England estimates that inflation will reach 1.9% by the end of the year
According to ONS figures released Wednesday, the UK’s Consumer Price Index (CPI), a measure of inflation, rose 0.4% during March.
CPI was raised through increased fuel costs and clothing, even when food prices fell.
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ONS also confirmed that manufacturer-set prices rose 1.9% until March, at their highest in just under two years.
The price they paid for inputs has risen the sharpest since September 2018.
The Bank of England estimates that inflation will reach 1.9% by the end of the year, but experts say it could exceed that figure before that.
“We’re committed to providing a great opportunity to help you,” said Yael Selfin, Chief Economist at KPMG. “Inflation will push inflation above its 2% target later this year, along with the rise in the energy price caps at OFGEM in April and the reversal of VAT rates for hospitality and tourism.”
Others say there’s nothing to worry about inflation surges, including AJ Bell’s financial analyst Laith Khalaf.
“We don’t have to worry about a surge in inflation. Not yet. We know that inflation will always rise as the start of the pandemic, especially when we start wrapping up the sharp decline in energy prices that we witnessed last spring. I was,” Karaff said.
“The gasoline prices were 4.3p higher in March than a year ago at 119.4p. In May 2020, they fell to 106.2p, so even though fuel prices are now relatively stable, this inflation is still the case. The upward pressure will continue to increase over the next few months.”
Khalaf added that there are many monitoring factors that could affect spiral inflation.
“The big question is whether the economic recovery combined with fiscal and monetary stimulus will begin to promote more sustained inflation trends that could become uncontrollable,” Kalaff said.
“This risk is unlikely to roost anytime soon. Unemployment is expected to rise later this year, which has led to wage increases. But beyond that, a cheap powder barrel of money I’m worried that it can set fire to the inflation spiral.”
