Commenting on this morning’s UK CPI inflation data, Melanie Baker, Senior Economist at Royal London Asset Management said:
“The pressure is building for another rate rise from the Bank of England in February.
“Many of the sources of rising inflation could still be described as transitory, but with inflation surprising on the upside by so much, with core inflation higher and at such a high level, worries about inflation expectations are also likely to build.
“UK inflation is expected to rise sharply with another jump in energy bills expected in April when Ofgem reset the energy price cap. In the meantime, prospects of higher interest rates, high rates of inflation and pay growth that is not keeping pace means the financial situation of many households will be worsening. The chances of a strong year for real consumer spending are dimming further.”
The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.