CPI inflation (09.30 BST) figures for March will probably show that the UK has entered deflation. Admittedly, the 3.6% monthly rise in petrol prices in March, reflecting the rebound in oil prices, will add about 0.1 percentage points to the headline CPI rate. But offsetting this, the cut in gas prices by British Gas will show up in the figures for the first time, increasing the drag from energy prices. Meanwhile, the fall in import prices in response to the stronger pound is likely to have put further downward pressure on core goods inflation. “We have pencilled in a fall in CPI inflation from zero to -0.1%. Meanwhile, March’s producer prices figures (also 09.30 BST) should indicate that there are no signs of building price pressures at the start of the production pipeline.” – said Capital Economics in a report on Monday
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