According to the Office for National Statistics the major contributing factor to the rise were a rise in both air and sea fares, with prices jumping 18 and 22% on the month respectively, compared to a fall of 6% and rise of 3% respectively in the same month last year.
“The timing of Easter was likely a factor in both cases, with the Easter weekend falling within the April collection period for these services this year, but mainly missing the March and totally missing the April price collection periods a year ago,” the OFS said.
But, while the increase in inflation was slightly ahead of forecasts, it did not overly alarm analysts.
Orla Garvey, Sovereign Fund Manager at Aviva Investors, said of the rise: “Today’s print is broadly in line with current BoE forecasts. While investors are focused on the European Central Bank’s attempts to boost the euro zone’s flagging economy, inflation expectations will likely remain low.”
Mike Amey, managing director and head of UK portfolios at PIMCO, agreed that today’s number was unlikely to change the general outlook for the economy: “The basic theme of little inflation risk remains intact. For the MPC the labour market is the key to the path of monetary policy. The MPC will start to raise interest rates when the economy can withstand it – that means average earnings need to rise from their current 1.7%.”
