The Office for National Statistics is anticipated to say that CPI inflation hit 9.1 percent in April, driven largely by the 54 per cent hike in energy regulator Ofgem’s price cap.
The last time inflation was so high was February 1982, when it was running at 10.4 percent.
The day before, the ONS is prone to say that the speed of pay growth has stalled.
Economists imagine it would say that average earnings grew 5.4 per cent in March, whereas the month before, pay growth accelerated from 4.8 percent to five.4 percent.
Investec chief economist Philip Shaw said: “These figures will prove beyond any shadow of doubt there may be a cost-of-living crisis.”
The important thing driver here is the value cap, and combined with other pressures, you are looking at 9.1 percent inflation, which is a 40-year high.”
“This probably won’t be the tip of it because we’re prone to have one other price cap increase in October. Average earnings growth demonstrates how tough households are finding things. Earnings are usually not keeping pace with prices.”
Paul Dales, Capital Economics’ chief UK economist, said that with inflation surging to a 40-year high, he believes the ONS will say on Friday that retail sales volumes fell 0.5 percent last month.
“Households are feeling the pinch from sky-high inflation. We predict retail sales volumes fell for a 3rd consecutive month in April, as consumer confidence sank and the squeeze on households’ real incomes from higher inflation intensified,” he said.
On Tuesday, the ONS may also release its latest figures for unemployment and advantages claims. The unemployment rate is anticipated to remain at 3.8 percent, while the number claiming advantages is forecast to fall by 38,800 to 1.67 million.
Martin Beck, chief economic adviser to the EY ITEM Club think tank, said: “This week it’s more bad news with prices rising and wages not keeping pace. The one good thing is unemployment isn’t expected to vary.”
Tomorrow, Bank of England Governor Andrew Bailey will go before MPs on the Treasury Select Committee to elucidate how and why inflation is running to this point away from the central bank’s 2 percent goal.
