Rising energy and clothing prices push UK inflation rate to 1.5% Business News

The inflation rate more than doubled in April as the economy began to reopen and retailers began to raise prices.

Official figures show that increases in clothing and energy prices were the main contributors to the rise in the cost of living. However, economists stressed that the increases were in line with expectations and that inflation remains below the Bank of England’s target rate.

Inflation in the consumer price index, which measures the cost of a range of commonly purchased goods and services, fell from 0.7% in March to 1.5% in April, according to official figures.

Gas and electricity prices were pushed up after the energy regulator increased the default tariff cap in response to rising wholesale energy costs. Gasoline pump prices also rose after oil prices recovered from last year’s lows during the height of the pandemic.

Clothing prices rose after non-essential stores reopened on April 12

Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “Inflation rose in April, mainly due to the rise in prices this year from the drops seen at the start of the pandemic in the same time last year.

“This is most evident in household utility bills and clothing prices.

“As the price of crude oil continues to rise, this has spilled over into the cost of fuel, which is now at its highest since January 2020.”

Financial markets have been gripped by inflation fears in 2021 as the global economy recovers and suppliers in some sectors struggle to keep up with the surge in demand.

The Bank of England forecast earlier this month that UK inflation will rise above its 2% target, to 2.4% in the last three months of 2021, largely due to because of energy prices.

Andrew Bailey, the Bank’s governor, sought to ease inflation fears, saying the rise would likely be temporary.

Neil Messenger, director of financial planning at Aberdeen Standard Life, said: “The Bank of England hasn’t shown any signs of increasing interest rates anytime soon, which is why it belongs savers to do what they can to get their money to beat inflation during this time.

“People who live off their savings, such as retirees, should pay close attention to the overall rate and act now to factor it into their future financial plans.”