UK Inflation Positive Again

Published / Last Updated on 15/06/2015

UK Inflation Positive Again.

After month in the deflation zone, UK prices are back up with the Consumer Prices Index (CPI) back up to 0.1%pa in May. April saw 0.1%pa deflation as a result of falling oil prices, food and associated transport costs.

Likewise, a rise in oil prices has seen prices at the petrol pumps go back up and we are back into inflation, but only just.

That said, this is not like inflation is running away here. This is 0.1% per year, i.e. prices have hardly risen and in reality over a 14 month period they are net neutral i.e. remained the same.

The economy is therefore still on a knife edge and as such we cannot see any significant changes to interest rates in the coming summer months although by Autumn, when the Greek issue is resolved and when Europe starts to fight back after its €100bn euro’s per month quantitative easing programme has some real effect, we can see the UK inflation heading upwards.

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