Inflation rate rises to 4.5%
THE brief respite from rising inflation came to an end today with new figures this morning showing that CPI had returned to its upward path.
CPI inflation in April rose to 4.5%, bouncing back from a fall to 4% in March.
The Bank of England’s latest quarterly inflation report, published last week, forecast CPI inflation could hit 5% before falling back over the next two years.
Coverage of the latest inflation figures is brought to TheBusinessDesk.com’s readers in association with stockbrokers Redmayne-Bentley.
Georgina Mitchell, head of investment services at Redmayne-Bentley, said: “‘It was widely expected that last month’s fall would prove to be temporary so this month’s figures come as no great surprise.
“The silver lining to this cloud is that consumers need not fear an interest rate rise just yet. Despite expectations that inflation will hit 5% some time in 2011, concerns that it will reverse quickly and may turn to deflation in the longer-term are likely to encourage the MPC to allow inflation to run for now. Added to this some feel that the psychological effects of an interest rate rise now would outweigh any benefit it would have.”
The ONS air transport, alcohol and tobacco and housing were the biggest upward pressures on inflation in the last month with furniture and household equipment the only sector seeing prices fall..
The RPI inflation figure fell in April to 5.2%, from 5.3% in March.