Taylor Swift could be among the dilemmas facing the Bank of England this summer, as economists predict the American singer’s arena tour could have put some pressure on UK inflation last month. A busy week for economic data will shed more light on the economy after inflation returned to the Bank’s 2% target in May. It marked a milestone after nearly three years of above-target inflation, thanks largely to food prices rising at a much slower rate than before.
(PA Graphics/PA) Analysts for Investec and Deutsche Bank are predicting CPI to have stayed put, while Pantheon Macroeconomics expects it to have dipped to 1.9% for the latest month, below the Bank’s target level. But experts said it will be the finer details of the inflation data that could be more relevant for the central bank.
Sanjay Raja, a senior economist for Deutsche Bank, said services inflation – an important gauge which looks only at service-related categories such as hospitality, culture and housing – could drop to 5.6% from 5.7% in May as it continues its “slow descent” toward target levels.
But he cautioned over one-off pressures including live music price rises, driven by Taylor Swift’s UK arena tour. Swift – who performed in Edinburgh, Liverpool, Cardiff and London in June – could have pushed up average concert prices during the month. Mr Raja therefore said he expects live music inflation to nearly double to around 10% in June from 5.
7% in May. Meanwhile, economists will also be watching .