Inflation may no longer be at double digits and the cost of living measure even managed to hit the 2 per cent target last year, which prompted interest rate cuts in August and November.
He said: “From April, the national average household water bill will increase by £123 a year to £603, a considerable uptick of 26 per cent, and the cap on energy bills is expected to rise in the same month.” Tuesday’s announcement shows the cost for the average household being an additional £9.25 a month for energy.
Laith Khalaf, head of investment analysis at AJ Bell, said: “Inflation is now one per cent away from target and heading in the wrong direction, and consumers better buckle up for prices to trend higher throughout this year.
With core inflation nearly twice the Bank of England’s target we see little chance the Bank starts cutting rates again any time soon.”.
Of course, the Bank must look to the longer term when it comes to monetary policy, but cutting rates while inflation is heading in the wrong direction is still a pretty sticky wicket.”.
