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The Consumer Price Index (CPI) measure of inflation is expected to reach 2.6% in April - the highest rate since September 2013 - when official figures are released on Tuesday. It would mean the squeeze on consumer spending continued last month following a temporary respite in February and March when CPI paused at 2.3%. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said CPI could even reach 2.7%, with upward pressure coming from the airline industry. Airline prices are expected to have soared last month because the Easter holidays fell on April 16 this year rather than March 27 in 2016. He said: "Prices for airline travel tend to rise very sharply around the Easter holidays, which will add 0.2% to the inflation rate." The way the Office for National Statistics measures prices means Npower and Scottish Power's decision to increase gas and electricity prices in March will also have an impact on April's CPI rate. "Government changes to vehicle excise duty in April also made it more expensive to buy a new car than before," he added. "Retailers will be continuing to pass on higher import prices to consumers, adding another 0.1% to the rate as sterling's shock comes through." The Bank of England said in its latest inflation report that CPI would peak at 3% later this year as the pound's slump since the Brexit vote causes price tags to tick higher. Despite inflation's upward march, the Bank's Monetary Policy Committee voted to keep interest rates unchanged on Thursday, with outgoing policymaker Kristin Forbes remaining the sole dissenter. However, the minutes suggested the next move in rates would still be a rise, with other MPC members repeating that it would take "little further upside news" to consider joining Ms Forbes in voting for a hike. The Bank said the pound's gains since the General Election would help inflation drop back in 2018 and 2019. Howard Archer, chief UK and European economist at IHS Markit, said: "We see inflation easing back from a peak of 3% in late-2017/early-2018 to 2.6% at the end of 2018 and 2.3% at the end of 2019.

For the original version including any supplementary images or video, visit http://www.aol.co.uk/money/2017/05/14/inflation-expected-to-rise-amid-utility-price-hikes-and-timing-o/

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