A hike in private school fees and is airfares will accelerate inflation at the start of this year and the rate of Consumer Prices Index (CPI) is expected to show inflation has come in at 2.8%, on Wednesday.
This will represent an increase from 2.5% in December, as economists say higher private school fees amid Labour’s VAT hike will cause the rise.
At the start of this year private schools passed on the price increases on to parents after the standard rate of 20% was applied to private schools and boarding fees.
Economists at Pantheon Macroeconomics said that private school fees are a “wild card” and they are assuming a 14 month on month increase in fees for secondary and primary school fees.
Airlines are expected to climb higher for January due to seasonal prices, both of these are expected to see a hike in services inflation above 5% following a 4.4% hi in inflation.
Over the coming month inflation is expected to rise above the Bank of England’s 2% target.
