"More inflation misery is coming for consumers"
- Rob Wood, chief U.K. economist at Berenberg Bank
Britain's consumer prices held steady last month, extending its run above the Bank of England's target of 2% and maintaining a squeeze on consumers. The Office for National Statistics said that the nation's inflation rate stood at 2.8%, the same as in February and meeting analysts' expectations. Constantly rising prices and a deep fiscal tightening all is weighing on consumers spending. The inflation rate has been above the BoE's target level every month since December 2009. Moreover, the central bank expects the measure of consumer prices to exceed 3% later this year.
"More inflation misery is coming for consumers," said Rob Wood, chief U.K. economist at Berenberg Bank in London. The pace of inflation will probably accelerate further in the coming months, he said. "The BOE seems unlikely to engage in more asset purchases in the next month or two."
"I do think you are going to see some increases in inflation over the course of the next three or four months ... (but) we've seen lower oil prices and that could actually limit the peak in inflation," said Deutsche Bank economist George Buckley.
© Dukascopy Bank SA