This year, an early Easter provoked an unexpected rise in inflation when it jumped up to 0.5% in March according to figures released today by the Office for National Statistics. Sitting at 0.3% in February, the increase is good news for the pound which has been sitting at record low levels in recent months.
With many taking holidays abroad during the March break, air fares rose by over 20% month-on-month. A downward pull was felt from dwindling food and non-alcoholic beverage prices.
The Consumer Price Index is still a long way from reaching its 2% target, meaning an impending rate rise is unlikely. April may prove to correct the increase as the early Easter effect wears off.
A lot still rides on the referendum vote in June. If we stay in Europe the economy could look to gain some momentum in the second half of the year. However, monetary policy would become a lot more complicated if constituents voted for a Brexit. Sterling would more than likely fall sharply and increased uncertainty would weigh down on economic activity, especially on business investment.