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Energy and transport costs pushed U.K. inflation back above target last month.
Consumer prices rose 2.1% from a year earlier, ending a three-month spell of inflation below the Bank of England's 2 percent goal, Office for National Statistics data published Wednesday show. The figure was slightly below the 2.2% forecast by economists.
The pickup, from 1.9% in March, was driven by the lifting of the government cap on default energy tariffs. Electricity prices jumped 10.9% and gas increased 9.3%, dwarfing increases seen a year earlier.
There was also upward pressure from higher auto-fuel prices, while the timing of Easter boosted transport costs, with air fares surging more than 26% on the month. The four-day vacation began on April 19, three weeks later than it did last year. The largest offsetting factor came from cheaper computer games.
The widely-anticipated spike is expected to prove temporary, however, with the BOE predicting a return to target this month and inflation well below 2% by August. Core inflation stayed at 1.8%, giving officials breathing space to keep interest rates on hold amid the continuing Brexit deadlock.
Other figures published by the ONS show:
- Pipeline pressures remained relatively subdued, with producer input prices rising 3.8% from a year earlier and output prices gaining 2.1%.
- House prices in England and Wales rose an annual 1.4% in March. In London, they fell 1.9% amid concerns over Brexit and higher property taxes. Property values in the capital are now at their lowest level since April 2016, before the Brexit referendum.
- The budget deficit in April, the first month of the fiscal year, was 5.8 billion pounds ($7.4 billion). The shortfall was little changed from a year earlier as revenue rose 2.4% and spending including capital investment increased 2.7%.
- The deficit in 2018-19 was revised down to 23.5 billion pounds, a 17-year low and equal to just 1.1% of GDP. However, spending will be boosted this year by an 8 billion-pound cash boost for the National Health Service announced in 2018.
- A cash measure of the public finances was in surplus by almost 10 billion pounds last month as Treasury coffers were boosted by the sale of Bradford & Bingley mortgages. Net debt stood at 82.7% of GDP.
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