Inflation will pass BoE's 2% target once lockdown restrictions ease, analysts warn

CPI inflation rose 0.6% in December

While the short-term outlook for UK inflation remains low, analysts are warning that it is likely to rise later in the year once lockdown restrictions ease and the economy recovers.

Figures from the Office for National Statistics show that CPI inflation rose 0.6% in December after a rise of 0.3% in November. Despite food and drink process falling, rising transport costs along with increasing prices for clothing and recreation helped to push up inflation. While this remains well below the Bank of England's target of 2%, investment professionals believe that once the economy gathers momentum and demand starts to outstrip supply inflation will start to rise more sharply. UK inflation edges higher in December on rising transport costs Jon Hudson, UK equity fund...