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UK inflation jumps more than expected in April to hit highest since 2013
[LONDON] British inflation rose to its highest level since September 2013 last month, according to official data on Tuesday that underlined a growing squeeze on households ahead of the June 8 national election.
Consumer prices increased in April by 2.7 per cent compared with a year earlier, the Office for National Statistics said, slightly above economists' expectation for a 2.6 per cent annual rise in a Reuters poll.
Inflation has accelerated in Britain in recent months, pushed up by a weakening of the pound since last year's decision by voters to leave the European Union, and by the rise in oil prices which has fuelled inflation in other countries too.
Last week Bank of England Governor Mark Carney warned this year would be challenging for consumers, saying that wages are about to fall in real, inflation-adjusted terms.
But with little sign of an overheating domestic economy, all but one of the BoE's eight policymakers voted last week to keep rates on hold.
The latest inflation figures were boosted most of all by rising airfares during the Easter holidays, which were in March last year. Rising clothing prices, higher car tax and electricity also pushed up consumer prices.
Many economists say the impact of the fall in sterling on consumer prices will be felt more strongly in the coming months, and the central bank expects inflation to peak at nearly 3 per cent by the end of this year.
Excluding oil prices and other volatile components such as food, core consumer price inflation rose to 2.4 per cent, the strongest rate since March 2013 and above economists' expectations for it to rise to 2.2 per cent.
Services prices - which the BoE view as a guide to domestic inflation pressures - rose by 3.0 per cent, the biggest jump since September 2013, though this was affected by higher air fares.
Factory output prices - a guide to future consumer price pressures - increased 3.6 per cent, unchanged from the previous month and above forecasts of a 3.4 per cent annual increase in the Reuters poll.
Prices paid by factories for materials and energy rose at the weakest annual pace since November, up 16.6 per cent.
The ONS said house prices in March rose at their weakest rate since October 2013, up 4.1 per cent on the year.
Prices in London alone grew just 1.5 per cent, the weakest since March 2012.