Recent inflation developments have raised the spectre of a possible resurgence of sustained price pressures in the UK. Since dropping to a low of 1.1% last September, the annual rate of consumer price inflation has risen to 3.4% UK inflation to fall back sharply over the coming year
Recent inflation developments have raised the spectre of a possible resurgence of sustained price pressures in the UK. Since dropping to a low of 1.1% last September, the annual rate of consumer price inflation has risen to 3.4% (see chart a). CPI inflation has now been above the government’s 2% target for four consecutive months, with the move above 3% in January prompting the BoE Governor to write an open letter of explanation to the Chancellor, explaining the reasons for the overshoot and the measures being taken to rectify it.
