Higher petrol and clothes  prices fuel inflation


Higher petrol and clothes prices fuel inflation amid improving forecasts for the UK economy

Higher fuel and clothes prices have lifted inflation to 0.7 per cent in March from 0.4 per cent the previous month.

The tailing-off of winter discounting lifted the price of fashion, while a rise in the cost of petrol added to inflation for the first time since February 2020, according to data from the Office for National Statistics.

Inflation has been on a rollercoaster ride since the pandemic began, as lockdown slammed the brakes on spending.

Fuel prices:  A rise in the cost of petrol added to inflation for the first time since February 2020, according to data from the Office for National Statistics

Fuel prices:  A rise in the cost of petrol added to inflation for the first time since February 2020, according to data from the Office for National Statistics

But experts expect the cost of living to start rising as restrictions lift, businesses try to recoup money they have lost, and households rush out to spend.

The inflation rise came amid improving forecasts for the UK’s bounce-back from the pandemic, according to a consensus of City economists published by the Treasury. 

They predict the economy will grow 5.7 per cent in 2021, up from earlier expectations of 4.8 per cent.

The Bank of England aims to keep inflation at 2 per cent, to encourage growth but prevent living costs from rising too rapidly.

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