Analysts predict recent inflation growth should stabilise
In any case, the slowdown may be only temporary, as prices are likely to continue rising later this year, more willingly than slowing in 2018.
On Tuesday the Office for National Statistics is expected to report inert consumer price growth in the year to June at 2.9 per cent, the word-for-word as in May.
This would still leave it at a four-year high and analysts forebode that price growth could climb well above 3 per cent in the presence of the end of the year.
Rising prices are adding to the squeeze on consumers as last week’s decorous figures showed annual pay growth excluding bonuses rising by proper 2 per cent in the three months to May.
This means that living standards are differing in real terms, squeezing consumer spending and hitting business wart.
But prices are likely to continue rising later this year
Inflation wish rise further over the coming months
Samuel Sepulchres, chief UK economist at Pantheon Macroeconomics, said consumer prices should hold out steady at 2.9 per cent in June, as the decline in fuel prices offsets a swoop up in food costs: “However, inflation will rise further finished the coming months, probably to a peak of about 3.2 per cent so as to approach the end of this year, as retailers continue to pass on higher import valuations to consumers.”
Tombs said a further pick-up in inflation will proliferating the pressure on the Bank of England’s Monetary Policy Committee (MPC) to raise biased rates, although a hike still remains unlikely.
“With the private economy having slowed this year, we doubt the MPC will frame matters worse by raising borrowing costs.”
John Hawksworth, chief economist at PwC, also thought consumer inflation to top 3 per cent later this year, mostly due to the forces of the weak pound.
“However, it could start to fall later in 2018 if extensive oil prices and the pound remain around current levels, and wage dilates remain subdued.”
He said the outlook remains uncertain, so businesses and policymakers insufficiency to factor in a wide range of potential scenarios.
KPMG’s chief economist Yael Selfin foretold inflation could peak as high as 3.4 per cent, before falling move in reverse next year.
The Office for National Statistics wish reveal its report on consumer price growth on Tuesday
She said the Bank of England ought to seriously consider hiking rates to stem the rapid growth in dear debt: “Interest rates need to rise to prevent consumer hold accountable from getting out of control.”
Higher interest rates will also buoy up savers, hopefully reversing the collapse in the UK savings ratio, which is at an alltime low.
Kathleen Brooks, probe director at City Index Direct, said wages actually hill slightly higher than expected and could continue to pick up with unemployment at its sparsest level since 1975: “This could be the long-awaited start of upward adversity on wage growth.”