Inflation has jumped to its highest level since September 2013, reaching 2.7 percent in April.
According to The Office for National Statistics (ONS), this is primarily due to the increased cost of air travel, which increased 18.6 percent from the month before.
Clothing, vehicle excise duty, and electricity bills also contributed to the increase. The price of clothes increased by 1.1 percent between March and April, the highest in six years.
James Smith, an economist at ING, said: “Above-consensus UK inflation will test the patience of some of the Bank of England hawks. But we think a household spending squeeze and elevated Brexit uncertainty mean we won’t see rate hikes until 2019,”
Samuel Tombs of Pantheon Macroeconomics had this to say on the increased inflation: “While we still think that the impact of sterling’s depreciation on inflation will be more concentrated this year than the MPC thinks – we see CPI inflation peaking in Q4 at 3.2 per cent – we doubt that a majority will emerge to raise rates this year,”
The ONS said last month that the average wages increased by 2.3 percent in the three months prior to February. This means that there was no growth after accounting for the inflation.
“The timing of Easter looks to have played an important role in pushing inflation higher in year-on-year terms.” said Chris Williamson, chief business economist at analysts IHS Markit.
“But sterling’s depreciation since the referendum last June is also clearly a significant factor, lifting prices for imports and likely to pile further upward pressure on consumer prices in coming months.
“There are nevertheless signs that inflation could perhaps rise less than many had been fearing.
“Survey data are already showing companies’ costs are rising at a slower rate than earlier in the year, and recent weeks have seen some easing in global commodity prices, notably oil.”
The Bank of England warned last week as measured by the Consumer Prices Index (CPI), it would peak at just below 3 percent this year.