UK March inflation accelerates more than forecast on energy
Wednesday, 21 April 2010
LONDON , April 20 (Bloomberg): The U.K.'s inflation rate jumped more than economists forecast in March, breaching the government's upper limit for the second time this year after energy costs rose within weeks of the election.
A weak pound is helping push up the cost of imports as Prime Minister Gordon Brown tries to convince voters ahead of a May 6 election that he is the best choice to help nurture the economic recovery and reduce the budget deficit. The Bank of England has a mandate to target inflation at 2 percent and keep it within 1 percentage point of that goal.
"The fall in sterling has added pressure" on prices, David Page, an economist at Investec Securities in London, said in a telephone interview before the data was published. "The market is looking for an easing in inflation across the rest of the year.
If that doesn't come through to the extent the bank is hoping, that starts to raise questions about how it is expected to respond." Inflation accelerated due to higher prices for gas, fuel, air transport and food, the statistics office said. Inflation has exceeded the central bank's 2 percent target for the last four months.
A weak pound is helping push up the cost of imports as Prime Minister Gordon Brown tries to convince voters ahead of a May 6 election that he is the best choice to help nurture the economic recovery and reduce the budget deficit. The Bank of England has a mandate to target inflation at 2 percent and keep it within 1 percentage point of that goal.
"The fall in sterling has added pressure" on prices, David Page, an economist at Investec Securities in London, said in a telephone interview before the data was published. "The market is looking for an easing in inflation across the rest of the year.
If that doesn't come through to the extent the bank is hoping, that starts to raise questions about how it is expected to respond." Inflation accelerated due to higher prices for gas, fuel, air transport and food, the statistics office said. Inflation has exceeded the central bank's 2 percent target for the last four months.