ECONOMISTS’ VIEWS: DID INFLATION STICK LAST MONTH?
PHILIP RUSH | NOMURA
“We forecast CPI inflation at 4.5 per cent year on year, but for RPI inflation to rise to 5.5 per cent. CPI is likely to be softened by payback from April’s surge in transport costs, compounded by lower oil prices. But we expect this to be offset by higher food and new car prices, partly reflecting base effects.”
MICHAEL SAUNDERS | CITIGROUP
“We expect the data to show CPI inflation stable at 4.5 per cent annualised in May. There probably will be a sharp drop in air fares, which rose unusually sharply in April because of the late Easter and Royal Wedding holiday. Yet soft base effects in May 2010 should offset this.”
HOWARD ARCHER | IHS GLOBAL INSIGHT
“CPI stabilising at 4.5 per cent would keep inflation at its highest level since October 2008 and more than double the Bank of England’s target level. However, core consumer price inflation is seen edging back to 3.6 per cent in May after spiking up to 3.7 per cent in April from 3.2 per cent in March.”