You are here: Home - Household Bills - News -

Inflation flat: pay now rising well ahead of prices

0
Written by:
17/04/2019
UK consumer price inflation (CPI) unexpectedly remained steady at 1.9% in March, official figures show.

Economists had predicted inflation to tick up slightly to 2%.

The largest upward contribution to CPI was rising motor fuel and clothing prices, according to the Office for National Statistics (ONS).

The largest, offsetting, downward contributions came from a range of recreational and cultural goods, food and motor vehicles.

With average wages increasing by 3.4%, pay is now rising well ahead of prices.

The absence of inflationary pressures in the domestic economy means there’s no pressure for the Bank of England to raise interest rates, according to Ben Brettell, senior economist at Hargreaves Lansdown.

“The Bank has said it thinks higher interest rates will be appropriate in the coming months, as it aims to keep inflation close to its long-term 2% target.

“Assuming – and it’s a big assumption – that Brexit happens in a relatively orderly fashion, we could see rates gently nudge up later this year.

“If we leave with no deal, however, all bets are off. Inflation will spike as sterling weakens, but the Bank will probably cut rates regardless in a bid to support the economy.”

Tom Stevenson, investment director for personal investing at Fidelity International, added: “With interest rates unlikely to rise much for the foreseeable future, savers and investors will need to continue seeking decent returns in the stock market.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week