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Richard Campbell, ONS: "People will be feeling the pinch on their pocket. They will have less to spend"
The rate of consumer price index (CPI) inflation increased to 2.7% in May, up from 2.4% in April, the Office for National Statistics (ONS) said.
The ONS said the rise was due to a record increase in airfares and higher fuel prices.
Airfares rose by 22% between April and May, the highest increase since comparable records began in 2001.
The Bank of England has said it expects inflation to exceed 3% this year.
May's rise in inflation was higher than analysts predicted.
Continue reading the main storyThe price of clothing and footwear rose by 1.2% month-on-month, after a colder than normal May saw the cost of women's outdoor clothing increase.
However, food and drink prices fell, with a reduction in the cost of meat, vegetables, fruit, sugar and jams.
The Bank of England expects inflation to remain above its 2% target until early 2016.
The figures also showed that Retail Prices Index (RPI) inflation, which includes housing costs, rose to 3.1% in May from 2.9% in April.
Markit's chief economist Chris Williamson said that the rise in inflation acted as "a reminder that the ongoing erosion of spending power from rising prices will continue to act as a brake on economic recovery".
The sharp rise in airfares appeared to have taken analysts by surprise.
The ONS says prices rose on European, long-haul and domestic flights, and were the highest on record for the time of year.
Ross Walker, UK economist at RBS, said: "The good news is that [inflation] is coming in noticeably below the Bank of England's May forecast, where they had a 2.9% average for the second quarter.
"So looking over a two or three-month horizon, which I think you have to do, the inflation picture is a little better, but still above target and still a little bit sticky."
The inflation figure comes ahead of the release of minutes this week from the Bank of England's interest rate-setting Monetary Policy Committee (MPC).
The minutes from June's meeting will reveal the level of support among the committee for an expansion to quantitative easing.
Investec's chief economist Philip Shaw "The figures, if anything, are a touch stronger than expected. It looks pretty likely that CPI will go above 3% next month. The question is whether this will stand in the way of further quantitative easing. I think probably not.
"Next month is likely to be the peak and inflation looks set to fall back to target, or even below target, in the medium term."
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