Inflation in the UK is expected to rise tomorrow, with experts fearing it will likely surpass 4% as the economic effects of the Iran war become fully embedded. The Consumer Prices Index (CPI) is set to be released at 7am on Wednesday, May 20th, and a significant increase is widely anticipated.
Currently, inflation stands at 3.3%, up from 3% the previous month. Motor fuels have made the largest upward contribution to the monthly change as global oil prices have risen. Tensions in the Middle East remain high, with Iran still controlling the Strait of Hormuz, through which approximately 20% of the world's oil and liquefied natural gas travels.
Expert Predictions
Speaking to Newspage, Antonia Medlicott, Founder and Managing Director at London-based Investing Insiders, stated that she expects the figure to surpass 4%. She explained: "April's inflation figures will inevitably increase due to the Iran war. As much of the impact of the US-Iranian conflict had not yet hit the high street in the data released in March, we can expect the war to continue to influence April's figures, and this means it will likely surpass 4%. "
Medlicott added: "Services inflation hit 4.5% in the previous data, which was above forecasts, so this upward inflation trend will continue as fuel rises and the effects of the blockade of the Strait of Hormuz are fully felt across the country. We will not be reaching the Bank of England's inflation target of 2% anytime soon as the conflict drags on. At a time when the cost of living squeezes everything out of ordinary people, there is no light at the end of the tunnel, as inflation of food and energy far exceeds the headline figure."
Impact on Consumers
Medlicott warned: "Anyone with variable-rate debt should take note, as people with mortgages or loans will feel the strain from impending rises." The ongoing conflict and its impact on global oil supply continue to put upward pressure on prices, affecting households across the UK.
