Siobhan Mail, Director at Newport-based Seer Green financial planning specialists, said: “There are no real surprises here following last month’s increase to 2.7% – although I’m somewhat relieved the rate has not actually gone up again, bearing in mind the on-going issue with rising food prices and energy bills.
“Both of these are the main drivers yet again, behind the latest figure which continues the Bank of England’s record of seeing CPI above its 2% target for more than three years.
“The depressed state of the economy means the BoE is effectively unable to intervene and attempt to reduce inflation at the moment – rather than just explaining to the government that it’s missed its target yet again. Further global increases in food prices caused by weather problems in other food producing countries, and other UK energy company price rises are both areas that are anticipated to push the figure higher again, with 2014 being the earliest we can now expect to get anywhere near the 2% target.
“The trade-off of inflation control or economic growth has sparked lively and on-going debate in many quarters for some time now, including ‘battles’ between Mervyn King meeting his inflation target, and incoming BOE Governor Mark Carney who says the central banks should now focus on a target for economic growth – rather than inflation control. I know who my money would be on – and it wouldn’t be King!”