The rate of price growth in the U.K. surged to the highest pace in 30 months to open the second quarter, suggesting inflation is likely to continue rising further above the government’s target rate, according to The Daily Telegraph. On Tuesday, the Office for National Statistics reported that the consumer price index reached an annual rate of 4.5% in April, after receding to 4% in March. The figure surprised economists who had forecast for a smaller increase to 4.2%, and seems in-line with the Bank of England’s forecast for a 5% peak to be reached this year.
The headline figure was underscored by a surge in core consumer price inflation to an annual increase of 3.7% in April from 3.2% the prior month, which is the highest level since such data began in 1997. Howard Archer of IHS Global Insight said that the timing of Easter distorted the data, pointing out that the April figure is only just above the February level of 4.4%. Archer said, “Consumer price inflation will hopefully gradually start trending lower in the final months of 2011,” although the latest surge in price growth increases pressure on the central bank to raise interest rates.
Click here to read the story on consumer prices from The Daily Telegraph.
Click here for coverage of economists’ reactions, from The Daily Telegraph.