UK: Inflation expected to stay unchanged at 2.3%y/y for March – Lloyds Bank

According to Rhys Herbert, Research Analyst at Lloyds Bank, today’s UK inflation will be watched for further signs of acceleration.

Key Quotes

“CPI inflation continued its ascent in February, moving significantly through the BoE’s target to hit 2.3%y/y. The rise was broadly based, with transport and food the key drivers. Energy price pressures for March look to have been mixed, with a drop in automotive fuel prices probably partly offset by rising domestic energy tariffs. The big picture is that sterling’s depreciation is continuing to drive up import costs. March ‘core’ inflation should drop back to 1.9%y/y as this year’s later timing of Easter holds back seasonal rises in airfares. Nevertheless, net upward pressure elsewhere, including from food, should leave overall inflation unchanged at 2.3%y/y.”