British Inflation Reaches 7 Year High Point

British 12-month inflation hit the highest level for seven years in March, accelerating to 1.9%, in part owing to a strong rise in transport energy costs, official data showed April 20.

That brought inflation to just under the 2.0% target which the Bank of England is tasked to meet, stoking fears of an interest rate hike soon after Britons vote in a general election on May 5, analysts said.

The figure, compared with March 2004, was the highest level since May 1998 and outstripped analysts' consensus forecasts for an annual figure of 1.8%. The increase followed three months of stability during which time the annual rate remained at 1.6% -- the highest since June 2004.

The consumer price index rose by 0.4% in March from February, the Office for National Statistics (ONS) said, matching analysts' expectations. "The clear culprit is (higher) energy prices," Calyon economist Daragh Maher said. "Stripping these out, the (12-month) inflation rate is a much less worrisome 1.3%."

Copyright Agence France-Presse, 2005

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