While the latest official inflation measures showed a fall in the year to April 2023, mainly due to falling electricity and gas prices, they were still higher than expected. This is because of prices for food, which continue to rise at record levels, but also the persistence of so-called ‘core inflation’ – prices for goods and services other than (volatile) energy and food. April is the month when firms set their prices for the coming year, and the effect of this year’s reset showed strongly in goods and services alike. As a result of this, most of our panel of City economists have raised their forecasts for the coming period.
