Bank of England’s Carney plays down 2.3pc jump in UK inflation
Inflation in the United Kingdom crashed through the Bank of England’s 2pc target last month, pushed up by rising food and fuel prices.
The data highlights in part the impact the Brexit vote has had on the pound.
Consumer prices increased by 2.3pc – faster than expected by economists – and marking the biggest annual increase in three-and-a-half years, according to data from the Office for National Statistics (ONS).
That, in theory, means the Bank could look to increase interest rates, as it is the first time in more than three years that inflation has topped its target.
But Governor Mark Carney said it was important not to overreact to a single month’s data.
London-based think tank the Centre for Economics and Business Research said the data marks the end of an unusually long bout of extremely low inflation brought about by low oil prices and a lack of investment.
“Looking forward, we expect the rise in inflation to continue, although at a slightly slower pace as the weakness of sterling and the lower oil price have already been factored in to some extent,” said economist Kay Daniel Neufeld.
“However, given that inflation has exceeded the 2pc mark so early in the year, prices may rise even more than previously expected.”
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