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IEA - Sticky inflation could mean higher interest rates

Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, commented on the latest Office for National Statistics (ONS) consumer price inflation figures 

“Today’s disappointing numbers show how difficult it is to bring inflation back down once central banks have allowed it to run out of control.

“The fall in headline inflation in April, from 10.1% to 8.7%, is obviously welcome but entirely due to the smaller increase in domestic energy bills, which we already knew about. Other elements of inflation remain sticky, including food prices and the core measure (excluding food and energy) which jumped sharply.

“There was at least some more evidence today that pipeline cost pressures are easing, including producer price inflation in the food sector. May’s inflation data should therefore be better. But the next set of inflation figures will have to be much better to prevent interest rates from rising further.”

Consumer price inflation, UK: April 2023

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