BEVERLY HILLS, May 19, (THEWILL) – British inflation has soared to the highest level since the early stages of the pandemic, official data showed Wednesday, stoking fears of a global inflationary spike as economies reopen.
The Consumer Prices Index rate hit 1.5 percent in April, attaining the highest point since March 2020 when the COVID crisis erupted, the Office for National Statistics said in a statement.
The upswing, which compared with 0.7 percent in March 2021, was fuelled by rising clothing and energy costs and came as the UK economy embarked on a phased reopening.
“Inflation rose in April, mainly due to prices rising this year compared with the falls seen at the start of the pandemic this time last year. This was seen most clearly in household utility bills and clothing prices”, said chief ONS economist Grant Fitzner.
Energy prices rose after the government recently increased its electricity and gas tariff cap, having cut it a year earlier. And rising crude oil prices fed through into higher costs for motor fuels, which are now at their highest level since January 2020.
Wednesday’s news has fuelled fears that global inflation could also spike this year when Britain and other nations fully emerge from COVID-19.
Commentators remain fearful that massive global Covid stimulus, combined with pent-up consumer demand, could trigger soaring inflation and spark interest rate hikes that could choke off any nascent recovery.
“At current levels, inflation is nothing to fret about, but there is rising concern that the fiscal and monetary response to the pandemic has sown the seeds of an inflationary scare further down the road”, said AJ Bell analyst Laith Khalaf.
Prime Minister Boris Johnson’s Conservative government has spent more than £350 billion ($487 billion, 406 billion euros) in emergency measures since the outbreak of COVID-19 at the start of last year.
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