UK Misses Inflation Target
Published / Last Updated on 17/04/2012
UK Misses Inflation Target.
According to the Office for National Statistics (ONS), the UK consumer prices index has risen to 3.5% in March and the retail prices index fell to 3.6%.
The largest upward pressures to CPI came from food, clothing, recreation and culture.There were downward pressures from electricity, gas and other fuels and transport according to the ONS.
Inflation has fallen noticeably since its high in September 2011, but still remains above the Bank of England’s 2% target. CPI reached a record high of 5.2% in September 2011 while RPI stood at 5.8% in September 2011, its highest point since June 1991.
Our view: Inflation rising will mean, index linked gilt capital values will go up, fixed rate gilts capital value will fall as yields rise. Annuity rates for those coming into retirement will rise.