Commenting on this morning’s UK inflation data, Melanie Baker, Senior Economist at Royal London Asset Management said:
“CPI inflation has finally broken out of the 0.2% to 1.0% year-on-year range that it has been in since the pandemic took hold.
“However, even with core CPI higher, this doesn’t yet reflect rising underlying domestic inflationary pressure.
“The UK economy is still operating below pre-crisis levels and inflation expectations look reasonably well anchored. However, as the economy reopens, it seems likely that we will see some further price increases and inflation is likely to end the year higher. Global supply chain pressures may also become more strongly reflected in the price of core goods.”