Inflation

  1. Investment managers react: keep an eye on inflation

    BlackRock, one of the world's largest pension and money managers, offers a gentle warning in what it describes as "this blurring of monetary and fiscal policy" as very low interest rates and big government spending take off, not just in the UK, but around the world.

    "While there is little likelihood of material near-term inflation, once we look out further into this decade, this blurring of monetary and fiscal policy could bring about upside inflation risks globally," said Vivek Paul, Chief Investment Strategist for the UK, BlackRock Investment Institute, the research wing of the firm.

    He says investors might consider looking at inflation-linked government bonds rather than the vanilla variety.

  2. UK inflation rate falls to 1.5%

    Money

    The UK's inflation rate fell to 1.5% in March, largely driven by falls in the price of clothing and fuel ahead of the coronavirus lockdown.

    The Consumer Prices Index (CPI) fell from 1.7% in February,according to the Office for National Statistics (ONS).

    Clothing stores had offered more discounts as shoppers began staying at home, it said. Falling oil prices also resulted in cheaper petrol.

    Economists have said inflation could slide to 0.5% in 2020 as the economy shrinks.

    Read more on this story here.

  3. 'It's certainly a global phenomenon'

    BBC Radio 5 Live

    A car at a petrol pump

    UK inflation in January rose to a six-month high as petrol and house prices rose, official figures show.

    The Consumer Prices Index (CPI) stood at 1.8% last month, up from 1.3% in December,the Office for National Statistics said.

    However Simon French, chief economist at Panmure Gordon & Co expects the inflation rate to come back down again over the next few months.

    “Since the coronavirus outbreak the global oil prices have gone down about $10 a barrel and that will start to be reflected at the petrol pump and you’ll start to see inflation soften in the middle of the year and then start to pick up," he told BBC Radio 5 Live's Wake Up to Money programme.

    "But let's put it into context - the Bank of England has a 2% inflation target and inflation is still firmly below that level.

    "If you look at previous decades... people can remember 18% inflation. It's certainly a global phenomenon, it's not one unique to the UK that inflation is very, very low."

  4. 'UK not out of Brexit fog'

    UK notes and coins

    Robert Alster, head of Investment Services at Close Brothers Asset Management has been taking a look at the latest inflation figures.

    “Inflation is ticking upwards, driven by greater consumer confidence, but does remain below target," he says.

    "However, despite this greater economic optimism, the UK is not yet out of the Brexit fog and the 31 December cliff-edge is only getting closer. The Bank of England will be trepidatious about bold monetary decisions until the scale of this post-EU disruption is known. A similar approach is expected to be taken by the new Chancellor on 11 March [Budget Day]."

  5. Fuel prices and airfares push up UK inflation

    Woman tops up car

    "The rise in inflation is largely the result of higher prices at the pump and airfares falling by less than a year ago," ONS statistician Mike Hardie said.

    He said gas and electricity prices were unchanged this month, "but fell this time last year due to the introduction of the energy price cap".

    Fuel prices were up 4.7% compared with a year previously, biggest rise since November 2018, the ONS added.

    Meanwhile, a measure of core inflation, which excludes energy, fuel, alcohol and tobacco, rose to 1.6% from 1.4% in December. The ONS figures also suggested more pressure in the pipeline for consumer prices.

    In addition the ONS said manufacturers' raw material costs rose 2.1% in annual terms last month, the biggest increase since April and reflecting a surge in precious metal prices, particularly for palladium, which is used making catalytic converters for cars.

  6. Post-Brexit price rise?

    trolley

    British shoppers should brace for a rise in food and less choice if the government fails to come up with a plan for regulatory checks at ports with the European Union, the British Retail Consortium said.

    Official negotiations start next month.

    "The issue is simple – higher tariffs and extensive checks will harm consumers, retailers, and the UK economy. The government must set about to negotiate a zero tariff agreement that minimises checks and red tape otherwise it will be consumers who suffer as a result," said BRC chief executive Helen Dickinson.