UK inflation more than doubled to 1.5 per cent in April on the year marking the start of what the Bank of England hopes will be a temporary surge in prices as the economy reopens from the latest round of restrictions.
The sharp rise in Consumer Price Inflation followed a 0.7 per cent annual increase in March, the Office for National Statistics said, with the jump driven mainly by a rise in domestic energy prices along with clothing and footwear and the cost of petrol.
As the UK’s reopening allows consumers to start splurging cash, the BoE expects inflation to exceed its 2 per cent target and reach 2.5 per cent by the end of this year.
ONS chief economist Grant Fitzner said April's inflation surge was caused by the rise in prices this year compared with the falls seen at the start of the pandemic last year.
“This was seen most clearly in household utility bills and clothing prices,” Mr Fitzner said.
“As the price of crude oil continues to rise, this has fed through to the cost of motor fuels, which are now at their highest since January 2020.”
On a monthly basis, the CPI rose by 0.6 per cent in April, after a 0.3 per cent increase in March. This compares with a fall of 0.2 per cent in April last year.
The 9 per cent surge in gas and electricity prices drove April's inflation rise, the ONS found, while clothing and footwear prices rose 2.4 per cent after a 1.6 per cent drop a year ago.
Prices charged by manufacturers rose 3.9 per cent in the year to April, the biggest rise in more than two years, while a measure of input prices paid for raw materials by factories rose 9.9 per cent from a year earlier, the fastest rate since February 2017.
BoE governor Andrew Bailey on Tuesday said there was no strong evidence that higher prices paid by manufacturers were feeding through to consumer prices.
However, he said the central bank would "be watching this extremely carefully" and take action if necessary.
Laith Khalaf, financial analyst at AJ Bell, said the price rises were in key areas where it is hard for consumers to control spending, such as transport, clothing and household energy.
“At current levels, inflation is nothing to fret about but there is rising concern that the fiscal and monetary response to the pandemic has sown the seeds of an inflationary scare farther down the road,” Mr Khalaf said.
“For the moment, the BoE is dismissing consumer price increases as a natural bounce back from the depths of the pandemic last spring. But the economic recovery could be a Trojan horse, smuggling inflation into the UK right under the nose of central bankers.”
UK inflation is set to rise further over the months ahead with prices for air travel, domestic accommodation and package holidays expected to leap in response to rebounding consumer demand, Samuel Tombs, UK economist at Pantheon Macroeconomics said.
The end of the VAT cut to help hospitality businesses through the Covid-19 crisis from October will also boost prices, although the end of the furlough scheme and an accompanying rise in unemployment may ease BoE fears over prices running out of control, he said.
Despite the rising inflation rate, the UK was still behind the US, where the latest reading came in at 4.2 per cent.
Meanwhile, eurozone inflation rose 1.6 per cent on the year in April because of a sharp rise in the costs of energy and services, according to the European Union's statistics office Eurostat, with a 0.6 per cent increase on March.
“The BoE has made it clear that it will tolerate inflation rising modestly above target, without pulling the trigger on interest rate rises,” Mr Khalaf said.
“However, if inflation looks like it’s going to get a significant foothold, markets will take matters into their own hands and raise borrowing costs across the economy.”
Meanwhile, inflationary fears have already started to trickle into markets, with the 10-year gilt now yielding 0.9 per cent, up from 0.2 per cent at the beginning of the year.
The UK experienced soaring inflation in the 1970s and ‘80s, but the BoE dismissed recent increases in 2008 and 2011 as temporary, despite prices surging close to 5 per cent in both instances.
Andy Haldane, the BoE’s departing chief economist, said the momentum behind the recovery was strong enough to risk a damaging wave of inflation.
If a sustained inflationary period is realised, Mr Khalaf said it would be a paradigm shift from 25 years of extremely benign price rises, “which have provided comforting mood music for stocks and bonds”.
“Investors don’t need to hit the panic button just yet, but they do need to factor the potential for higher rates of inflation into their plans. Where inflation is concerned, it’s better safe than sorry," he said.
Know before you go
- Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
- If you’re driving, make sure your insurance covers Oman.
- By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
- Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
- Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
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WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
Day 1 results:
Open Men (bonus points in brackets)
New Zealand 125 (1) beat UAE 111 (3)
India 111 (4) beat Singapore 75 (0)
South Africa 66 (2) beat Sri Lanka 57 (2)
Australia 126 (4) beat Malaysia -16 (0)
Open Women
New Zealand 64 (2) beat South Africa 57 (2)
England 69 (3) beat UAE 63 (1)
Australia 124 (4) beat UAE 23 (0)
New Zealand 74 (2) beat England 55 (2)
This is an info box
- info goes here
- and here
- and here
FIXTURES
All kick-off times 10.45pm UAE ( 4 GMT)
Tuesday
Mairobr v Liverpool
Spartak Moscow v Sevilla
Feyenoord v Shakhtar Donetsk
Manchester City v Napoli
Monaco v Besiktas
RB Leipzig v Porto
Apoel Nicosia v Borussia Dortmund
Real Madrid v Tottenham Hotspur
Wednesday
Benfica v Manchester United
CSKA Moscow v Basel
Bayern Munich v Celtic
Anderlecht v Paris Saint-Germain
Qarabag v Atletico Madrid
Chelsea v Roma
Barcelona v Olympiakos
Juventus v Sporting Lisbon
Expert input
If you had all the money in the world, what’s the one sneaker you would buy or create?
“There are a few shoes that have ‘grail’ status for me. But the one I have always wanted is the Nike x Patta x Parra Air Max 1 - Cherrywood. To get a pair in my size brand new is would cost me between Dh8,000 and Dh 10,000.” Jack Brett
“If I had all the money, I would approach Nike and ask them to do my own Air Force 1, that’s one of my dreams.” Yaseen Benchouche
“There’s nothing out there yet that I’d pay an insane amount for, but I’d love to create my own shoe with Tinker Hatfield and Jordan.” Joshua Cox
“I think I’d buy a defunct footwear brand; I’d like the challenge of reinterpreting a brand’s history and changing options.” Kris Balerite
“I’d stir up a creative collaboration with designers Martin Margiela of the mixed patchwork sneakers, and Yohji Yamamoto.” Hussain Moloobhoy
“If I had all the money in the world, I’d live somewhere where I’d never have to wear shoes again.” Raj Malhotra
The%20specs
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EA Sports FC 25
Developer: EA Vancouver, EA Romania
Publisher: EA Sports
Consoles: Nintendo Switch, PlayStation 4&5, Xbox One and Xbox Series X/S
Rating: 3.5/5
Global state-owned investor ranking by size
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EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
Top New Zealand cop on policing the virtual world
New Zealand police began closer scrutiny of social media and online communities after the attacks on two mosques in March, the country's top officer said.
The killing of 51 people in Christchurch and wounding of more than 40 others shocked the world. Brenton Tarrant, a suspected white supremacist, was accused of the killings. His trial is ongoing and he denies the charges.
Mike Bush, commissioner of New Zealand Police, said officers looked closely at how they monitored social media in the wake of the tragedy to see if lessons could be learned.
“We decided that it was fit for purpose but we need to deepen it in terms of community relationships, extending them not only with the traditional community but the virtual one as well," he told The National.
"We want to get ahead of attacks like we suffered in New Zealand so we have to challenge ourselves to be better."
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
Fight card
Bantamweight
Siyovush Gulmamadov (TJK) v Rey Nacionales (PHI)
Lightweight
Alexandru Chitoran (ROM) v Hussein Fakhir Abed (SYR)
Catch 74kg
Tohir Zhuraev (TJK) v Omar Hussein (JOR)
Strawweight (Female)
Weronika Zygmunt (POL) v Seo Ye-dam (KOR)
Featherweight
Kaan Ofli (TUR) v Walid Laidi (ALG)
Lightweight
Leandro Martins (BRA) v Abdulla Al Bousheiri (KUW)
Welterweight
Ahmad Labban (LEB) v Sofiane Benchohra (ALG)
Bantamweight
Jaures Dea (CAM) v Nawras Abzakh (JOR)
Lightweight
Mohammed Yahya (UAE) v Glen Ranillo (PHI)
Lightweight
Alan Omer (GER) v Aidan Aguilera (AUS)
Welterweight
Mounir Lazzez (TUN) Sasha Palatnikov (HKG)
Featherweight title bout
Romando Dy (PHI) v Lee Do-gyeom (KOR)
