Ernst & Young gave a warning on Monday, that inflation rate in United Kingdom could climb during summer period and remain above the targeted level of 2% in foreseeable perspective.
An economic forecasting group, the ITEM club, announced that high inflation could remain a permanent fixture of countrys economy. According to clubs report, consumer price inflation could accelerate to above 3% during summer and decrease during autumn.
ITEM club posed forecast that inflation would be 2.9% in 2013, while dropping to 2.6% in the next two years.
As a counterpoint to that estimate, Bank of Englands outgoing Governor, Mervyn King stated, that inflation rate would remain in close range to the 2% target in 2014 and 2015.
Situation in Britains economy showed, however, that this inflationary target, had been exceeded since December 2009 and that was a reason for the central bank not to consider a new phase of bond repurchases.
ITEM club stressed on the potential negative effects high inflation rate would have on economy. Reports from last month showed, that UK Gross Domestic Product (GDP) increased by barely 0.3% during Q1 2013. Club experts also said, that if inflation rate had been around averaged 2%, the GDP figure would be 10 billion British pounds higher (about 15 billion US dollars higher).
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