UK inflation accelerated to 0.5% yoy in March 2016

UK inflation accelerated to 0.5% yoy in March 2016, which was the sharpest increase since November 2014 and above expectations of the analysts. For comparison in February it was 0.3%. The core inflation, which excludes volatile prices of food and fuel, also accelerated more than expected to 1.5%, which is- the sharpest pace since August 2014. The consumer price index in the service sector grows by 2.8%. The results remained above expectations in the first quarter and may renew calls for an increase of interest rates by some central bankers, advocates of a tighter monetary policy. At its meeting on Thursday members of the Monetary Policy Committee is expected to vote unanimously not to change interest rates, but inflationary pressures sooner or later may lead to a split in the committee.

There was a sharp rise in air flight tickets in February and March, amounting to 22.9%. The dynamics can be explained by the earlier Easter this year. Most index outweigh the lower prices of food and soft drinks.

Bank of England expects inflation this year to accelerate and reach 1% until the end of 2016.

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