Tuesday, April 16, 2013
Better news on inflation
Posted by David Smith at 11:30 AM
Category: Thoughts and responses

Consumer price inflation held steady at 2.8% in March, continuing a remarkable period of stability, albeit one above the 2% target. The latest 2.8% rate was the same as in February, and for four months before that it was 2.7%. Sir Mervyn King will hope this persists, sparing him the duty of writing a letter to the chancellor before he steps down at the end of June. Such a letter would have to be written if inflation goes back above 3%.

Some analysts think this will happen, largely because of base effects - the consumer prices index was relatively flat a year ago, right through to the summer - though lower petrol prices will help this time. They helped a little in March.

The Office for National Statistics now produces an array of inflation measures. CPIH, including owner-occupiers', also held steady, but at 2.6%. RPI inflation edged up from 3.2% to 3.3%, while the new RPIJ measure (don't ask) rose from 2.6% to 2.7%. More here.

If you're looking for good news, it may be in the producer price index, published at the same time. Output price inflation in March edged down from 2.3% to 2%, with core output price inflation at just 1.3%. Input price inflation was a modest 0.4%, down from 2.1% in February. More here.