UK Consumer Price Index Rises in March

UK inflation, as measured by their national consumer prices index, has increased by 0.2% up to 0.5% for March, in comparison to the figures released for the previous month.

The latest figure has continued the gradual hikes in prices that has been registered since October last year, although historically the prices are lower that what they have been for the majority of the time since records began.

The month on month rise in prices were mainly attributed to the rises in air fares and clothing.

Although they were offset by a fall in food prices and a smaller rise in petrol prices compared to a year ago.

As competition has intensified between food outlets, particularly supermarkets, the price of food has been reduced by 0.3%.

Producer price inflation, or the price of goods bought and sold by UK manufacturers, continued to fall in March.

Output prices for UK manufacturers fell by 0.9% in the year to March, which slightly eased from the 1.1% price decline in the year to February.

German Inflation Increases by 0.3% in March

Official figures have found that German inflation has risen by a month on month 0.3% for March.

Prices were boosted for March as Easter came earlier in the calendar this year, as package holiday prices increased by 7.1%, in a year on year comparison.

The hike in the price movement of package holidays alone, contributed just under 0.2 percentage points to the current inflation rate.

There were also year on year rises in food prices, which increased by 1.3%, especially for fruit and vegetables which escalated by 7.5% and 6.4% respectively.

A major decrease in energy prices of 8.9% compared with March a year ago, created significant downward pressures on the inflation rate, heating oil prices dropped by 23.5%, and motor fuels by 13.5%.

The decline in energy prices have resulted in the total prices of goods falling by 1.2% in March in contrast to the same time a year ago.

Even though there was price rises recorded for jewellery, clocks and watches which rose by 4.7%, newspapers and periodicals were higher by 4.4%, and tobacco products by 3.9%.

UK Pound Increases on the Euro

The GBP/EUR so far today GMT has favoured sterling, as the pound has jumped up to buying 1.25 euros, from starting the day purchasing 1.247 euros.

Against the US dollar, the GBP/USD rate also rallied behind sterling, and this morning the pound has peaked at buying $1.43, from just under the $1.425.

Moneycorps in the their daily market update, have speculated as to what has caused the pound to rise.

It has been suggested that the  reopening of the UK parliament after its Easter break had rekindled faith in the pound, whereas others attributed it to the successful sale of a steel works in Scunthorpe in the north of England.

The more likely scenario the forex company say, is that influential bearish movements have decided to take a profit on short selling positions with the pound.

This tactic has encouraged others to do follow the same course, when they saw how readily that the pound had rebounded.