Fuel costs set to push up UK inflation
Higher fuel costs are likely to have helped nudge UK inflation higher last month, economists said today.
Official figures due to be released by the Office for National Statistics today are expected to show the annual rate of Consumer Price Index (CPI) inflation lifted to 1.7% in February from 1.6% the previous month.
Economists say petrol prices should have risen by about 1% over the month after just inching ahead the same time last year.
Higher utility are also expected to have had an impact after rising significantly in recent weeks, while increases in the cost of food may have had an effect.
Economist Philip Shaw at Investec Securities said inflation should not exceed 1.7% for some time – suggesting the Bank of England will decide inflation is under control and leave interest rates on hold at 4.75%.
He said: “The Bank is likely to see through this short-term uptick and we do not expect a rate hike to 5% in response.”
Another expert said a number of factors were likely to push inflation higher in the coming months, including the fact that house prices have not weakened as much as expected and a recent rebound in oil prices.
