Shrugging off the depressive effect of demonetisation, India's Consumer Price Index (CPI), or retail inflation, during March rose month-on-month at 3.81 per cent, even as factory output in the country contracted by (-) 1.2 per cent in February, official data showed on Wednesday.
The claimant count unexpectedly increased by a seasonally adjusted 25,500 in March, compared to expectations for a decline of 3,000 people and following a fall of 6,100 a month earlier, whose figure was revised from a previously reported reduction of 11,300.
Food inflation was 7.3 percent in March compared with 7.1 percent in February, while non-food inflation was 15.6 percent last month compared with 16.4 percent the month before, deputy government statistician Baah Wadieh told a news conference. Non-food CPI gained marginally to 2.3% in March, putting the first quarter reading also at 2.3%, or nearly a whole percentage point higher than 2016's full-year reading of 1.4%, led by significant jumps in the prices of services such as education and leisure, housing and healthcare. "With consumer price inflation holding steady in March, the Bank of England will continue to delay any interest rate rise for as long as possible, leaving the way clear for the property market to continue its slow upward progress". The ONS warns that "food, drink and clothing prices all rose in March", but were offset by relatively low airfares, since Easter this year falls in April rather than March.
Tesco Plc, the United Kingdom supermarket leader, said it would absorb some of the sterling-induced cost bump and keep prices low, which could ramp up pressure on competitors to do the same.
The combination of a sterling-induced inflation surge and lackluster wage growth is eating into the spending power of consumers, the engine of the British economy. Yesterday the ONS said prices rose 2.3 per cent in April, the second month in a row it has passed the Bank of England's two per cent targets.
Food price inflation slowed from -4.4% in February to -4.3% for March.
The figures were affected by a drop in food costs, while prices for medical care, housing, education and entertainment, and transportation and communication have increased, Sheng said.
'While the National Living Wage is protecting the lowest earners from this squeeze, boosting wages across the rest of the economy is the big living standards challenge of this parliament'. The inflation rate is expected to average about 7 per cent at the end of the year.
"It is very unlikely wages will be able to keep pace, leading to a squeeze in the spending power of United Kingdom shoppers".
But Dr Howard Archer, chief United Kingdom and European economist at IHS Markit, said: "Deteriorating consumer purchasing power and likely increasing business uncertainties and caution over Brexit are expected to take a mounting toll on growth and employment".
The National Bank of Rwanda (BNR) recently attributed the rising inflationary pressures to rising food prices due to bad weather conditions and transport inflation.