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UK Inflation Rate Increase

UK inflation rose in April following a surprise dip in March, the Office for National Statistics (ONS) said. The latest increase follows the unexpected dip during the previous month. The ONS figures show that the official rate of inflation rose to two percent, an increase of 0.2%.

The figures are based on The Consumer Price Index (CPI). The CPI is a measure of the average change in prices over a period of time in a fixed market basket of goods. It should represent typical purchases by the average consumer.

There are several key factors that have been identified as contributing to the increase. These include increased air travel as people took holidays over the Easter period and the well publicised increases in utility bills.

It now looks more likely that the Bank of England will increase interest rates over the long term. At present inflation is inline with the Bank’s target of 2%. However, the Bank believes that inflation will increase slightly before returning to normal levels.

15/05/06

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