Britons' wages after inflation rose at their slowest pace in almost three years in the three months' through February, data showed Wednesday, adding to signs that Britons are facing a living standards squeeze despite a tightening labor market.
Factory gate inflation "has eased", NBS analyst Sheng Guoqing said in a statement, noting that March's figure fell back from a 7.8 per cent increase in February after five months of expansion. Year-over-year growth in wages excluding bonuses fell to 1.9 per cent, from 2.2 per cent, dragging down the ex-bonus headline rate to 2.2 per cent, from 2.4 per cent.
Next reported its first decline in annual profits for eight years last month, blaming a shift in consumer spending habits due to increasing inflation.
He had added the official inflation target for 2017 is three per cent, after the CPI rose two per cent year-on-year in 2016.
"Our most recent Totaljobs Employment Index also reflected the strength of the job market, with applications up 32 per cent in the first three months of 2017 compared with the same period previous year".
Unilever wanted Tesco to raise the price of Marmite to offset an increase in inflation but the supermarket didn't want to deter its customers.
Danske Bank economist Conor Lambe said: "Despite these relatively small falls, the data still shows that there is considerable inflationary pressure further up the supply chain, so consumer price inflation is expected to remain elevated for some time yet".
China lowered gasoline and diesel retail prices late last month by most so far this year.
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Regardless of the breather in March, e xpectations remain that inflation will continue to jump sharply in the coming months as the effects of the weaker pound - which has fallen roughly 15% since the Brexit vote - trickle into the real economy, pushing up the price of goods. Meanwhile, the number in work rose by 39,000 to a new high of 31.8 million, representing an employment rate of 74.6 per cent, the joint highest since records began in 1971.
The total of people out of work in the United Kingdom has fallen to its lowest since 2006 with the employment rate equalling its highest figure since records began 46 years ago.
It means that in real terms - taking into account inflation - wages are being squeezed at the fastest rate in three years.
Nina Skero, managing economist at the Centre for Economics and Business Research (Cebr), said households will increasingly feel the pinch as wage growth struggles to keep up with inflation. Prices of housing water, electricity, gas and other fuels rose by 2.5 per cent, while cost of transport inched up 8.9 per cent.
The combination of a sterling-induced inflation surge and lackluster wage growth is eating into the spending power of consumers, the engine of the British economy.
Viktor Nossek, director of research at WisdomTree, said: "It is worth remembering that CPI in the USA is only just creeping up despite wages increasing in response to a stronger labour market".
But Labour's shadow work and pensions secretary Debbie Abrahams said: "The Government's abysmal record on living standards is getting even worse".