Tuesday, March 22, 2011
Inflation soars further away from the target
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

The Bank of England's trials and tribulations continue. 4.4% consumer price inflation - at a time of weak retail demand - and 5.5% retail price inflation are embarrassingly high numbers, and they won't get better (may get worse) any time soon.

These figures won't make any of the monetary policy committee's rate hawks change their minds and could persuade others to join them. May is the key month still, I think, though there'll be tension around the April meeting.

Not much reassurance in the detail. The only component of the CPI showing annual inflation of less than 2% is recreation and culture, 1.3%, all the others are significantly above. CPIY, excluding indirect tax changes, is now up to 2.8% (from 2.4% in January), CPI at constant tax rates is 2.7%. Details here.