UK CPI beats estimates

UK Office for National Statistics data released today showed cost of living as measured by consumer price index (CPI) rose faster than expected due to sharp rise in transportation cost.

CPI came-in at 0.4% m/m and 0.5% y/y, both above the estimated figure of 0.3% and 0.4% respectively. Core inflation, which excludes the volatile food and energy component, rose 1.5% y/y compared to the estimated rise of 1.3% from Feb figure of 1.2%.

The main upward effect came from transport, which added 0.14 percentage point to the 12 month change. The main driven was airfares which spiked because of the early timing of Easter.