April 2017 Inflation Up

Published / Last Updated on 18/05/2017

Inflation Up.

The Office for National Statistics (ONS) has release inflation figures for April confirming that inflation increased to 2.7%pa from 2.3% pa in March.

Higher prices for clothing, road tax, food and airfares (up nearly 19% on the year) have all contributed to the increase.

This is above the government target of 2% pa and the Bank of England forecasts that inflation will peak at 3%pa later this year.

Comment

No surprises although whilst there is talk of an interest rate increase to curb inflation, we suggest that interest rates may not rise until more is known about Brexit negotiations.  Low interest rates mean a weak pound, strengthening UK exports as our goods are cheaper overseas whilst making imports more expensive.   Although, we would not be surprised that when it comes to settling any EU divorce bill, action is taken to strengthen the pound.

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