British inflation rose to its highest level since September 2013 last month, according to official data that underlined a growing squeeze on households ahead of the June 8 national election. As Ivor Bennett reports, consumer prices increased in April by 2.7 percent compared with a year earlier.
Just two months ago, new car sales in Britain were at an all-time high. How quickly things can change. In April, they fell by nearly 20 percent. Brexit in part putting the brakes on; as well as consumers running out of gas. (SOUNDBITE) (English) NICK PARSONS, GLOBAL HEAD FX STRATEGY, NAB, SAYING: "There were already some cracks being seen in the housing market and in consumer confidence. And I think over the past 11 months since the referendum vote things only got worse for the U.K. consumer." The fall in sterling means the British high street is now less haven more hell. With inflation in April hitting 2.7 percent, prices are rising at their steepest in 3 and a half years. While real wages are only falling. A situation many believe will only get worse. (SOUNDBITE) (English) NICK PARSONS, GLOBAL HEAD FX STRATEGY, NAB, SAYING: "We simply don't see that pick up in wage growth. And if anything with that CPI likely to turn out a bit higher than it is forecast then we see that squeeze on real incomes really dampening consumer behaviour in the U.K." Air fares were the main driver of inflation The annual Easter price hike falling a month later than last year While clothing, road tax and electricity all played a part too. The Bank of England has warned inflation will peak at nearly 3 percent by the end of the year. For consumers, the challenges could be only just beginning.