Commenting on this morning’s UK inflation data, Melanie Baker, senior economist at Royal London Asset Management said:
“It is hard to get a clear read on underlying inflation when so much of the basket is imputed and when seasonal patterns are upset by lockdowns and social distancing restrictions. That picture should become clearer as we head through the second half of the year, following the government’s current ‘roadmap’ out of lockdown.
“UK inflation fell unexpectedly and strongly in February, but looking at the past several months together, CPI inflation remains in a range. It isn’t clearly trending anywhere, bumping around between 0.2% and 1% year on year since April 2020. Headline inflation should be pushed up more strongly in the next couple of months as positive energy price bases kick in.
“We are not expecting a rapid rise in underlying domestic inflationary pressure as the UK economy has taken such a hit over this crisis.”
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About Royal London
Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £148 billion, 8.8 million policies in force and 4,412 employees. Figures quoted are as at 31 December 2020.