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Potato bags grown in the UK in D & F McCarty Ltd. Fresh fruits and vegetable wholesalers in Norvich, UK, Tuesday, February 28, 2023. The acute shortage of salad items on the UK supermarket shelves has caused political debate, and some people in the industry who blame Brexit, while others speak it. Photographer: Chris Ratklif/Bloomberg via Getty Images
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The UK’s annual inflation level reached 3.4%in May, according to the economist’s expectations, according to the National Statistics Office (ONS) on Wednesday.
Ons originally published data showing an increase by 3.5% over 12 months before April but later said Backing tax data on the car has led to overcoming printing. April print would be 3.4% without this mistake.
At the time, the statistics body stated that its general policy did not revise inflation figures, so it left the original data on the spot. On Wednesday, it states that fixed tax data was used in the production of the consumer price index.
Perhaps the main inflation that eliminates more volatile energy, food, alcoholic and tobacco prices increased by 3.5% a year to May, decreasing from 3.8% in twelve months by April.
Ons notes that the biggest contribution to the monthly shift of the annual inflation rate occurred from transport, while the largest – and partly offset – up was from food, furniture and home products.
“The variety of contractual price movements meant that inflation was a little changed in May,” Richard Hais commented on Wednesday, acting the chief economist in ONS.
“The air tariffs fell this month, compared to the high growth at the same time last year, as the terms for Easter and school holidays affected prices. Meanwhile, the cost of automotive fuel also saw the fall.”
A British pound After prints, the dollar increased by $ 1.345.
Responding to the data, the UK Minister of Finance, Rachel Reivz, said that the Treasury accepted “the necessary choice for stabilization of state finance and inflation”, but recognized “something you need.”
Bank of England is waiting for wings
Inflation data will be the focus for the Bank of England as they try to determine the best interest rates on the background of stubborn high inflation and insufficient economic growth.
It is expected that in the next meeting on Thursday in the focus in the next meeting, the Central Bank will constantly hold interest rates, remembering the inflation pressure. However, economists expect politicians to go down to 25 basic points in the next meeting in August.
The latest inflation data “will not lead to the fact that the bank will deviate from its quarterly rate of reducing the rate,” said Ruth Gregory, Deputy Chief Economist in the Capital Economics, e -mail Wednesday.
“As inflation, it increased by 4.7%, a slight drop in IPC inflation in April from 3.5% to 3.4% in May will not push the Bank of England to deviate from the recent quarterly reduction path. The bank looks nailed to keep rates in the unchanging 4.25.
Earlier this year, the Bank of England said it expects the inflation rate to rise to 3.7% in the third quarter before starting to cool next year. If the conflict in the Middle East, oil prices and supply chains can be further broken, potentially pushing consumer prices more than expected.
Rob Wood, Chief Economist in the UK in Pantheon Macroeconomics, said his team expected inflation to bounce around the current inflation levels for the rest of the year by an average of 3.4%. He believes that in September the press will be a maximum of 3.6%. The cost of oil increases on the back on the conflict between Israel and Iran can push these figures above.
“We still fully take into account the higher oil prices after events in the Middle East-we use a 15-day average price for uninterrupted volatility but it would be necessary to increase the peak of inflation to 3.7%if oil and natural gas prices are supported at their modern levels. And the prices for natural gases that correspond to these elevations, and we said.
Oil futures on Tuesday grew by more than 4%after US president Donald Trump He demanded the “unconditional surrender” from Iran’s High leader Ayatollah Ali Khamenei.
