“March’s inflation drop is only a temporary reprieve as a hefty increase is nailed on for April, with rising energy bills and surging business costs, including higher national insurance, likely to lift inflation to around 3.5%.
“While services inflation remains strong, loosening labour market conditions and a flagging economy should eventually put it on a downward trajectory, despite the likely upward momentum from the national living wage increase.
“US tariffs have added notable complexity to the UK’s inflation outlook as, while costs for businesses may rise, prices for goods from countries such as China could fall as they seek to compete in alternative markets to the US.
“Though these figures will boost the case for a May interest rate cut, the Monetary Policy Committee may want to get a better handle of the impact of this global financial volatility before triggering another policy loosening.”
ENDS
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