Consumer spending to be reined in for short term as inflation remains on the up
UK Inflation rose 2.3% in March 2017. Although this is unchanged from the rate of growth seen in February, this figure is still above the Bank of England’s target of 2%. As rising cost pressures across the UK economy take their toll, it appears only a matter of time before this figure rises further. All eyes are now on the BoE and whether they will amend interest rates in response.
Ricky Nelson, head of corporate dealing at currency specialists, Halo Financial, said:
“UK Inflation increased 2.3% in March. Although this represents no change from February’s figures, food and clothing prices increased sharply, adding to the burden faced by hard-pressed consumers.
“Inflation began to rise following the UK Referendum vote to leave the European Union, which was the catalyst for the rapid fall in the value of the Pound. With inflation now increasing at similar levels to wages, it would suggest that consumer spending will have to be reined in for the short term.”