By Sonny Hammond
Todays consumer price data showed that the UK missed slipping into deflation by a narrow margin, alleviating economists worry of decreasing prices. The result of 0% was in line with analysts predictions, ultimately sending the GBP to a session low $1.4618.
For now the pressure of deflation has eased but there could still be a certain level of risk occurring in the near future. With falling prices the general public may hold onto their money for longer in hope for the cost to take a dive even further, but this in turn can have negative affects on the economy.
Some economists are suggesting that as the Easter holiday occurred at the beginning of April rather than midway, this generated higher sales in the holiday and travel industry in march unlike in April in 2014. The Bank of England’s target for inflation is 2%, even though in the long run in my opinion the British economy looks like its on its way to more prosperous times. I feel that Mark Carney will approach raising interest rates with a certain degree of vigilance due to the latest figures released today.