Record Air Fare Rises Push Inflation Higher

Written By Unknown on Selasa, 18 Juni 2013 | 16.01

The annual rate of inflation was driven higher than expected in May as air fares rose by record levels, according to the Office for National Statistics (ONS).

The rebound to 2.7% - which followed a surprise dip to 2.4% in April - was also blamed on fuel prices increasing but the ONS said the biggest contributing factor was a 22% jump in airline ticket costs between April and May.

It was, the statistical body said, the biggest rise in fares between those two months since records began in 2001.

Stubbornly high inflation is expected to peak around 3% over the next few months ensuring a summer of pain for households, though the Bank of England has forecast it will fall back towards its 2% target more quickly than originally expected.

Rising energy bills coupled with high fuel and tuition fees have been among the inflationary pressures facing the consumer in recent years at a time of below-inflation pay rises.

The resulting squeeze in household spending has been among the factors holding the UK economy back from stronger growth.

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