UK Inflation Stays High

Twelve-month CPI inflation fell only slightly in March to 10.1%, down from 10.4% in February.  The March figure is back to the same as for January, after which inflation rose, confounding predictions.

The figures contrast with those in the US, where inflation has fallen to 5% from a peak of 9.1% last June, and the eurozone, now at 6.9% from a peak of 11.1% last October.

UK food price inflation reached 19.2 in March, up from 18.2% in February.  This is likely to hit lower-paid workers especially hard.

The stubbornly high UK inflation has increased concern over wage claims. The Times reports that “the number of strikes in progress is the highest since the 1930s”.  The number of says lost to strikes is at 1989 levels, albeit still far below that of the 1970s.  

Bank of England chief economist Huw Pell suggested that inflation is staying high partly because people in the UK are reluctant to recognise that they are now poorer than they were and are trying to maintain spending power through pay rises.

Useful Links:

Consumer price inflation, UK - Office for National Statistics

Cost of living insights - Office for National Statistics (ons.gov.uk)

The Bank of England should concentrate on interest rates, not mixed messages (thetimes.co.uk)

Bank of England economist says people need to accept they are poorer - BBC News