Inflation to rise to three-year high amid jump in airfares and energy bills

The cost of living is climbing at the fastest pace in three-and-a-half years amid a jump in air fares and the start of a series of energy bill hikes, official figures will show this week.
Inflation, as measured by the consumer prices index, is expected to have climbed to 2.6pc in the year to April, up from 2.3pc in March.
This would be the highest rate since September 2013, when inflation stood at 2.7pc, and the third consecutive month above the Bank of England’s 2pc target.
A surge in airfares and package holidays is expected to add 0.2 percentage points to the headline rate alone due to the late timing of Easter, which fell in April this year compared with March in 2016.
Alan Clarke, an economist at Scotiabank, said price hikes by two of the “Big Six” energy companies in March would also boost price growth by a further 0.1 percentage points in April. Npower lifted its prices by an average of 10pc for its dual fuel customers, while Scottish Power raised its duel fuel bills by around 8pc.
Gas and electricity price increases by Scottish and Southern, E.ON and EDF will also push up inflation in the coming months.
The Bank of England forecast an even bigger near-term jump in inflation in its latest evaluation of the economy. It believes prices rose by 2.7pc in the year to April, where it is expected to remain until the start of the summer.
April’s increase in air fares is also expected to push up core inflation, which strips out volatile price movements in energy and food, to 2.2pc in April, from 1.8pc in March. This would also represent the highest rate since September 2013.
A surge in airfares and package holidays is expected to add 0.2 percentage points to the headline rate alone due to the late timing of Easter, which fell in April this year compared with March in 2016.
Alan Clarke, an economist at Scotiabank, said price hikes by two of the “Big Six” energy companies in March would also boost price growth by a further 0.1 percentage points in April. Npower lifted its prices by an average of 10pc for its dual fuel customers, while Scottish Power raised its duel fuel bills by around 8pc.
Gas and electricity price increases by Scottish and Southern, E.ON and EDF will also push up inflation in the coming months.
The Bank of England forecast an even bigger near-term jump in inflation in its latest evaluation of the economy. It believes prices rose by 2.7pc in the year to April, where it is expected to remain until the start of the summer.
April’s increase in air fares is also expected to push up core inflation, which strips out volatile price movements in energy and food, to 2.2pc in April, from 1.8pc in March. This would also represent the highest rate since September 2013.
 

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