Inflation rose to 2.7 percent as of April, and a contributing factor was the rise of the cost of electricity.This marks the highest spike in inflation in three-and-a-half years.
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The Office for National Statistics (ONS) highlighted increases in the cost of airfares, car tax, and clothing costs as other significant factors to the inflation spike.Consumer Price Inflation (CPI), according to them, surpassed City predictions by a tenth of a point, and greatly exceeded predictions for the previous month.
Wages, on the other hand, have increased by only 1.9 percent, and the TUC in addition to opposition parties explained that the growing cost of living and consumer spending become more observable in light of new inflation figures.
The last two years have seen more than measurable, economic growth due to an uptick in consumer spending primarily resultant of an increase in credit.The declining value of sterling after Brexit increased import prices, disadvantaging consumers and businesses bringing goods into the country yet benefitting those selling British goods and services abroad.
The Bank of England forecasted as of last week that 2.7 percent will be the peak of this inflation spike, portending a downward trend in response, yet this forecast seems erroneous now with the ONS appraising producer output price inflation as being upwards of three percent.
Liberal Democrat and shadow business secretary Susan Kramer said, "These worrying levels of inflation show the Brexit squeeze is hitting shopping baskets across the country."
TUC General Secretary Frances O'Grady pointed to the government and highlighted a responsibility to protect working citizens from a real-wage slump. "Working people are still £20 a week worse off, on average than they were before the crash," O'Grady explained. "That's why living standards must be a key battleground at this election."
City economists were unable to agree on the course of inflation during the next twelve months.Some anticipate moderate increase above 3 percent whereas others predicted the figure would remain more or less the same.
An economist at Scotia Bank, Alan Clarke, predicted that electricity and gas rates will increase further and that the rate of increase in food prices will accelerate, which will push CPI inflation to 3.25 percent before winter.