UK Inflation Worsens Despite Slower Sales

Despite a slowdown in retail sales during March (Sales fell 0.4% in the month) UK CPI inflation increased to 3%. Retail Price Index RPI (which includes more items) increased to 4.2%. This is at the upper limit of the Government’s inflation target. It is the highest UK inflation rate for quite a while.

Last month, The Bank kept interest rates stable at 5%. The Governor of the Bank of England, Mervyn King said that they had a difficult balancing act.

On the one hand they had a faltering housing market and decline in consumer spending.

On the side of the monetary policy scales, they have rising inflation. Mostly caused by higher food and energy prices.

Inflation at National Statistics

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