Sunday, August 31, 2014   

UK inflation up to 1.8pc in April
(05-20 16:53)

Britain's 12-month inflation accelerated in April for the first time for 10 months, lifted by the later timing of Easter, official data showed on Tuesday.
The increase comes against broad concern about unusually low inflation in Europe and particularly in the eurozone, of which Britain is not a member, AFP reports.
The British Consumer Prices Index (CPI) inflation measure ticked up to 1.8 percent, after striking a four-year low of 1.6 percent in March, the Office for National Statistics (ONS) said in a statement.
The data ends a period during which the key CPI rate slowed for six successive months.
"Increases in transport costs, notably air fares, sea fares and motor fuels, provided the largest contribution to the rise in the rate,'' the ONS added.
"An overall fall in the price of food was the largest offsetting factor.
"The timing of Easter is likely to have had an impact on the index -- most notably for air fares and sea fares.''
The Easter holiday break fell in April this year, but in March in 2013.
"This meant that prices for many goods -- such as airfares -- in April 2014 which were boosted by the Easter holidays compared to a normal level of prices in April 2013,'' added Capital Economics analyst Samuel Tombs.
"Clearly, this boost to the annual inflation rate will unwind next month.''
The CPI rate however remains under the Bank of England's government-set target level of 2.0 percent.
Unduly strong disinflation, or slowing of the rate of inflation, which takes price rises to a very low level can be dangerous for economies.
That is because it encourages businesses and households to delay investment and spending, thereby reducing demand, slowing growth, pushing up unemployment, and putting further downward pressure on prices in a vicious circle.   
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