UK inflation held steady in March at 2.8 per cent, its highest level since May last year, new figures released today reveal.
While the largest upward contribution came from books and digital cameras, lower inflation came from fuel as well as furniture, according to the Office for National Statistics (ONS).
The Consumer Price Index was broadly flat over the second half of last year and into 2013 and, over the last six months, it has been “particularly stable”.
Analysts anticipate an increase in the months ahead as rising prices of food and fuel, which rose by 2.2 pence per litre between February and March, are set to increase pressure, while consumer income is likely to be affected.
Gerald Lane, analyst at Shore Capital, said of the results: “We draw comfort to some degree about the stability of inflation, albeit at a higher level than take-home pay, which continues to point to falling real incomes for the UK consumer.
“We still suggest that the swings in commodity prices contribute to the volatility on the CPI levels. As such we question the ability of policy makers to manage inflation in this environment, aside from the influence over currency levels.
“And we would suggest that sterling needs to fall further over time to enable the UK exporting sector to grow relative to other parts of the economy, implying in turn a real incomes squeeze on the consumer.”
Meanwhile, the Retail Price Index stood at 3.3 per cent for the month, up 0.1 per cent on February’s figure.