Inflation creeps up to 1.8%
THE headline rate of inflation rose up to 1.8% last month, the Office for National Statistics said today.
The 0.2% increase in April- more than analysts expected – was the result of higher fuel costs. It is the first rise in the rate since June last year.
The ONS said that a rise in transport costs, particularly air and sea fares and the price of petrol – which stayed the same compared to falls last year – were the biggest contributors to the increase. Falling food prices helped offset that rise.
Spokesman Phil Gooding told the BBC that the timing of Easter this year had also had an impact on the figures.
The Retail Prices Index grew by 2.5% in the year ending April 2014, unchanged from March.
Economist Jeremy Cook said the increase justifies the Bank of England’s reluctance to seek an early increase in interest rates.
He said: “Inflation remains below target as it stands at the moment, but April’s increase has seen inflation back to outstripping wages. Mark Carney, said at the weekend that the Bank of England hopes that wages will accelerate soon, as productivity increases, and we will see a near-term lull in inflation.
“Labour market slack still exists and we will not see wages increase meaningfully until the labour market tightens further. April’s bounce higher in CPI is largely as a result of the late Easter celebration, plus logistical and transport costs that will have been affected by a slight uptick in oil and energy prices. “
