Sticky inflation could mean higher interest rates
24 May 2023
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25 June 2024
Commenting on the latest Office for National Statistics (ONS) consumer price inflation figures, Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, said:
“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 per cent to 8.7 per cent, 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.”
ENDS
Notes to Editors
CONTACT: media@iea.org.uk / 07763 365520
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
“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 per cent to 8.7 per cent, 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.”
ENDS
Notes to Editors
CONTACT: media@iea.org.uk / 07763 365520
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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