Investment Clock insights

Air fares boost inflation as real wage growth squeezed


Ian Kernohan

16 May 2016

As expected, CPI rose in April to 2.7% , with rising air fares a major contributor thanks to the later date of Easter this year. 

The impact of rising air fares was partially offset by a fall in fuel prices, but at just above the 2% target, this rate of inflation is not high by UK standards.

However with wages still sluggish, despite the sharp fall in unemployment, growth in real wages is being squeezed.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.