British inflation rate jumps to 0.5% in March

12th April 2016, Comments 0 comments

Britain's annual inflation rate rose faster than expected last month as higher air fares and clothing costs helped to offset a drop in food prices, official data showed on Tuesday.

The 12-month Consumer Price Index (CPI) rose by 0.5 percent in March compared with 0.3 percent in February, the Office for National Statistics said in a statement. The analysts' consensus had been for a gain of 0.4 percent.

"Rises in air fares and clothing prices were the main contributors to the increase in the rate... partially offset by a fall in food prices and a smaller rise in petrol prices than a year ago," the ONS added.

Despite the rise in the CPI, British annual inflation remains very low, while the Bank of England predicts it will stay far under its official 2.0-percent target for some time.

Meanwhile market "talk of higher interest rates on the back of today's data is premature", said Ben Brettell, senior economist at stockbrokers Hargreaves Lansdown.

"The UK economy is battling a number of significant headwinds at present. Consumer spending, aided by low inflation, low unemployment and rising wages, has been the engine of economic growth lately," he added.

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© 2016 AFP

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