You are here: Home - Household Bills - News -

Inflation flat: pay now rising well ahead of prices

Written by:
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.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week