Cheaper fuel drives down inflation, figures set to show
Cheaper gasoline prices are helping push inflation to its lowest level in nine months, the figures show
Cheaper gasoline prices have helped push inflation to its lowest level in nine months, this week’s figures show.
The Consumer Price Index is expected to have dropped to just under 10 percent in March.
But traders are targeting another rate hike in May amid fears that inflation will remain elevated for longer. They note that prices are still rising twice as fast as in the US.
Down: Cheaper gasoline prices have helped push inflation to its lowest level in nine months
Treasury officials are more hopeful, saying inflation could halve to 5 percent in the summer if the spike in fuel and food prices caused by the invasion of Ukraine eases.
That should also dampen wage demands, especially in the public sector, which will come as a relief to Chancellor Jeremy Hunt.
Economists say the level of unfilled vacancies – a driver of continued inflation – is also at a turning point, with a small increase in the unemployment rate expected this week.
“The red-hot UK labor market appears to be cooling,” said Investec bank’s Philip Shaw, “a slowdown that the Bank of England believes is necessary to curb inflation.”