Breaking News: Inflation rises by 0.1%

THE headline rate of inflation rose to 3.5% in March.

Figures published this morning showed CPI inflation rose by 0.1%.

The new figure raises questions over whether the increase in prices will slow as quickly as the Bank of England has forecast.

Coverage of the inflation data is brought to readers of TheBusinessDesk.com in partnership with stockbrokers Redmayne-Bentley.

David Scott, senior stockbroker at Redmayne-Bentley, said: “Disappointing hopes that the rise in consumer prices will moderate quickly and help support the economic recovery in the UK, inflation rate rose unexpectedly in March raising questions about the Bank of England’s prediction that inflation will ease this year back towards its target rate and could make policy makers less willing to take further monetary measures to stimulate the economy.

“The annual rate of CPI inflation rose to 3.5% in March from 3.4% in February, the first increase since September last year and on a monthly basis, consumer prices rose 0.3% in March following a 0.6% rise in February.

“Annual core inflation, which excludes volatile items like energy, food, tobacco and alcohol, also accelerated to 2.5% in March from 2.4% in February, when the market was expecting that a fall to 2.3%.”

The Office for National Statistics said the largest upward pressures on the CPI rate came from food, clothing and recreation and culture.

Partially offsetting these factors were downward pressures from electricity, gas and other fuels and transport.
 
The RPI annual inflation rate dropped by 0.1% in March to 3.6%.

The Bank of England has predicted CPI inflation will drop rapidly this year and has previously expressed concern it may even fall below the 2% target.

However, the minutes of the Monetary Policy Committee last month showed that concerns over rising oil prices had played a part on its decision not to further expand its quantitative easing programme.