UK inflation rate has fallen. Here’s why it won’t last long

Rising prices rate – inflation – one line has decreased to the second month, showing official figures.

In March, prices rose at an annual rate of 2.6%, much slower than the 11% inflation peak seen in 2022.

Petrol and toy prices have fallen, a relief for drivers and parents, while food prices are unchanged.

However, this data is for the previous month, and analysts suggest that it is “cool before the storm”.

Accurate predictions are difficult, but there are three major areas where inflation is expected to increase.

In early April, a host of domestic bills continued, which increases continuously.

They included utilities like domestic energy and water. Council tax for millions also increased significantly, and there were hikes for many people on the TV license along with phone and broadband contracts.

For businesses, an increase in employer national insurance contribution in April motivated him to impose his prices immediately.

Some of these increased costs will feed in the next set of inflation figures published in May. As a result, analysts feel that this inflation rate will quickly climb more than 3% (remember that the government and the Bank of England target 2%).

After that, there is significant uncertainty. Commentators suggest that inflation may not remain high, as long as we had already thought, we will come forward for reasons.

Rollercaster ride of US tariff policy dominates headlines and airways in the last few weeks.

The US President announced taxes on goods imported into America from all over the world, then turned backwards or delayed several, but it doubled on Chinese imports.

Some countries have hit back with their own tariffs; Others – such as UK – are trying to interact.

We are in relatively unknown area in modern economics and the picture is changing almost every day, so predictions should be taken with a large dose of salt.

In theory, when tariffs are announced, and vengeance comes, the higher tax will be more expensive for consumers in all rounds.

But, especially for the UK, things are far more fine. 10% tariff on UK goods imported by the US is less than fear, and is unlikely for vengeance.

In fact, the expectations of the UK-US trade deal rather than a trade war rather increase.

Therefore, any price increases.

China is facing 145% tariffs on a large scale on all its goods bound by America. If it puts obstacles in the US market, it may find other places to sell it – often manufactured cheaply – products, such as the UK.

A so -called dumping of cheap Chinese products in the UK will increase the price competition and slow down the rate of inflation.

The growth in the UK economy has been sluggish for some time, although the latest data was more positive than many people.

However, again associated with the issue of tariffs, warning that the improvement in Britain’s economic growth may be short -lived with some recession prediction.

This is not good news for the government, which has made economic development its priority.

Nor is it good news for workers, whose job security becomes less stable if business comes back on investment and starts cutting costs.

No job means less money to spend. This will reduce the rate of inflation, but whoever is suddenly unemployed will have small mercy.

Alternatively, the government’s drive for development can successfully motivate the economy against in headwind.

And there is even more pressure on policy makers in Bank of England to promote increase by cutting interest rates, reducing the cost of borrowing for loan and mortgage.

The cut in interest rates usually combines the demand of the consumer, and the risk of increasing prices and the rate of inflation is ahead of its 2% target.

Therefore, the bank rate-to-seater faces a delicate balance act for the rest of the year starting at its next meeting in May, especially because no one is sure how much the Titrops are staggering.