Inflation has risen more rapidly than anticipated at the beginning of the year, according to official data, fuelling concerns about persistent price pressures in the economy. The Office for National Statistics (ONS) reports that the headline rate of inflation increased to 3.0 per cent in January, up from 2.5 per cent in December and exceeding the 2.8 per cent predicted by City traders.
Grant Fitzner, chief economist at the ONS, said: "Inflation increased sharply this month to its highest annual rate since March last year," He attributed the rise to air fares not falling as much as typically seen at this time of year, partially due to the timing of flights over the Christmas and New Year period.
This news follows recent figures showing an acceleration in wage growth in the final quarter of last year, pushing regular private sector pay to its highest level since November 2023. Coupled with a surge in inflation, these statistics highlight the ongoing inflationary risks confronting the 海角视频 economy, necessitating a "gradual" approach to interest rate cuts by the Bank of England.
The Bank's latest forecasts suggest that inflation will peak at 3.7 per cent later this year, driven by escalating energy prices and increasing regulated prices, such as water bills and bus fares. However, Andrew Bailey, Governor of the Bank, stated that the expected rise in inflation does not reflect "a story about the fundamental state of the economy," as it is largely influenced by external factors.
The Bank anticipates ongoing progress in services inflation and wage growth throughout the year, which will facilitate additional interest rate reductions. Market predictions suggest two more rate cuts this year, as reported by .
Rachel Reeves said her 鈥渘umber one mission鈥 was getting 鈥渕ore pounds in pockets鈥 after the rate of Consumer Prices Index inflation increased to 3% in January, according to the Office for National Statistics.
The Chancellor said: 鈥淕etting more money in people鈥檚 pockets is my number one mission. Since the election we鈥檝e seen year on year wages after inflation growing at their fastest rate 鈥 worth an extra 拢1,000 a year on average 鈥 but I know that millions of families are still struggling to make ends meet.
鈥淭hat鈥檚 why we鈥檙e going further and faster to deliver economic growth. By taking on the blockers to get Britain building again, investing to rebuild our roads, rail and energy infrastructure and ripping up unnecessary regulation, we will kickstart growth, secure well-paid jobs and get more pounds in pockets.鈥
Just a few days ago, Andrew Bailey told BusinessLive the Bank would continue to take a 鈥榞radual and careful鈥 approach to any rate cuts.
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