This article was last updated on April 16, 2022
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Fresh food and clothing price increases blamed to have helped pushing the inflation slightly up to 3.5 percent in March, from 3.4 percent in February.
The Government’s main measure of inflation, consumer prices index (CPI) has risen a 0.1 percentage point from the previous month. It is the first time ever that CPI has increased in six months. The inflation rise is a setback to the Bank of England’s efforts to achieve the government’s inflation target of 2 percent by the end of the current year.
According to the latest figures from the Office for National Statistics (ONS), while CPI has moved up slightly, Retail Prices Index (RPI) inflation, which includes housing costs such as mortgage interest and council tax, fell slightly in March, to 3.6 percent from 3.7 percent.
As the prices of gas and electricity have dropped in March, basic food items such as bread, meat, cereals and vegetable became costly than March 2011, when supermarkets were introducing a large number of discounted promotions. Clothing, DVDs and computer games have also become expensive in March 2012 than the previous year.
The experts are of the view that this rise in inflation is expected to be a temporary blip but it may enable the Bank of England unlikely to inject more stimulus into the economy the coming month through another round of quantitative easing.
The average cost of petrol and diesel at the pump hit a record high in March, up to £1.38 and £1.46 a litre respectively. But the ONS has stated that the rise in fuel and lubricants was similar to last year so had only a little impact on inflation rise.
The published inflation data has indicated, the pound appreciated in value by 0.3 percent to 82.39 pence per euro. A few analysts are suggesting that the pound will soon climb 80 pence per euro, a level not attained since mid-2010.
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