“This disheartening resurgence in inflation confirms stagflation fears as notable increases in airfares, fuel and food prices triggered by the Iran war drove an unnerving jump in the headline rate.
“Though rising services inflation will worry rate-setters as it suggests that the fallout from the Iran war is already intensifying underlying price pressures, the squeeze from a weakening economy should limit any second-round effects.
“The extended ceasefire won’t prevent a painful period of accelerating inflation with skyrocketing energy costs and food prices likely to lift the headline rate above 4% by the autumn, despite slower economic demand.
“While these figures will make for uncomfortable reading among policymakers, the looming downward pressure on prices from a weakening economy should give rate-setters enough latitude to look through this period of intensifying inflation and keep rates on hold.”
ENDS
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Chartered accountants are talented, ethical and committed professionals. ICAEW represents more than 210,000 members and students around the world. 98 of the top 100 global brands employ ICAEW Chartered Accountants.* 87% of FTSE 100 companies, and 81% of FTSE 250 companies in the UK, have an ICAEW member on their board.
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* includes parent companies. Source: ICAEW member data March 2025, Interbrand, Best Global Brands 2024.
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