Inflation rate jump: Hymans Robertson comments

Commenting on the rise in inflation from 2.5% to 3% announced today, Chris Arcari, Head of Capital Markets, Hymans Robertson, says: 

“Looking further ahead, disinflation in energy, foods and goods prices is largely in the rear-view mirror and inflation is expected to continue to rise, with consensus forecasts suggesting it will reach 3.2% year-on-year by September 2025. While much of the forthcoming rise in inflation is expected to owe to temporary factors, such as energy prices, strong service sector and core inflation is likely to keep the Bank of England (BoE) cautious.  

“Indeed, labour market data released on the 18th February showed average weekly earnings grew 5.9% year-on-year in the 3 months to end December. Even allowing for potentially optimistic productivity growth assumptions, wage growth is running well above a level consistent with a sustainable return to the BoE's 2% target.”