Posted on Tuesday 20 May 2014 by Ulster Business

Inflation rise - ONS blames hike in petrol and airfares

Bank of England governor Mark Carney

The rate of inflation rose for the first time in nine months on the higher cost of fuel and travel costs, according to the Office of National Statistics (ONS) released today. It said the consumer price index climbed to 1.8% from 1.6% in March, with an increase to air fares, sea fares and petrol providing the largest contribution to the rate rise.

Meanwhile, UK house prices also grew 8% year on year, according to another report from the ONS, which, while significant, was down on the 9.2% recorded in February. Both sets of data provide food for thought for the Bank of England.
It's charged with keeping inflation at 2% and will be relieved to see the headline figure edge closer to its target but the still buoyant UK housing market will remain a cause for concern.

The central bank's governor Mark Carney warned last weekend that the UK accelerating housing market could turn into a bubble if left unchecked, raising concerns interest rates could be hiked sooner than expected.
That's a worry for Northern Ireland where the housing market, and the economy, are only starting to recover.

A hike in interest rates to cool the wider UK market could dent the embryonic recovery witnessed here.


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