British inflation rose in March for the first time in six months, blunting the Bank of England's appetite for injecting more cash into the struggling economy and piling further pressure on the government after a heavily criticised budget. The central bank and the government had been hoping that falling price pressures would ease the squeeze on Britons' finances and boost consumer spending, but the renewed rise in inflation could threaten the fragile economic recovery.
The International Monetary Fund (IMF) raised its 2012 growth forecast for Britain slightly to 0.8 percent on Tuesday and said the Bank of England had the room for further easing, despite concerns among more hawkish policymakers that this would make it even harder to get inflation back to the 2 percent target.
The $2.5 trillion economy has not yet recovered from the 2007-2009 crisis, which left millions of Britons poorer as inflation outpaced meagre wage rises and put pressure on the government to soften its drive to erase the huge budget deficit. The Office for National Statistics said the cost of food, clothing and recreation pushed consumer price inflation up to 3.5 percent in March from 3.4 percent in February, halting a five-month decline from a peak of 5.2 percent in September 2011.
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