UK inflation: The latest: Rates to move closer to 2% target to boost Bank of England

Good evening and welcome to our inflation blog which will cover the analysis and reaction to the figures due to be published on Wednesday.

The Bank of England (BoE) defines inflation simply as a term used by economists to “describe the rise in prices over time”.

Rising costs of goods and services on the UK's high streets indicate that the value of sterling is declining, which in turn means a reduction in consumer purchasing power and therefore quality. of life, since they are discouraged from spending more than they do. can afford.

This, in turn, affects national economic growth.

Experts said the April data could be a “make or break” for the Bank, which has been waiting for firm evidence that the CPI has reached its target level before it can cut interest rates.

James Smith, developed markets economist at ING, said: “It is no exaggeration to say that this week's UK inflation data will make or break a Bank of England rate cut in June.

“We believe the result is that headline inflation will fall below the Bank of England's 2% target in the May data due out in June and will remain there for most – if not all – of this year.

“But in the very short term, there is still some uncertainty about services inflation.

UK inflation could approach the Bank of England's target of 2 per cent when the Office for National Statistics (ONS) publishes the latest figures on Wednesday.

The Consumer Price Index (CPI) fell to 3.2 percent in March, compared with a year earlier, and forecasters polled by Reuters believe inflation will fall to 2.1 percent in April.

Pantheon Economics predicts a slightly lower figure of 2 percent, and Capital Economics thinks it could fall even further, to 1.9 percent. The Bank of England's (BoE) own forecast is 2.1 percent.