Higher RPI ex MIPs in February was disappointing but partly reflected higher seasonal food prices. A lower headline rate reflected falling mortgage rates, and this trend is expected to have continued in March. With inflation at the factory gate continuing to fall, all measures of RPI are expected to remain subdued over the next few months.
The treasury's budget forecast of a full year PSBR of £29bn is expected to have been exceeded by as much as £3bn. In February the cumulative total stood at £22.6bn, implying a March PSBR of £9.4bn. Receipts for the first eleven months of the year have undershot, with both Customs and Excise and Inland Revenue receipts falling short of expectations. At the same time spending has overshot marginally during the year and is expected to remain on the high side in March as departments spend their planned annual allocation ahead of the year end.
US industrial production will have been subdued in March as a result of the GM strike, with less hours worked and lower output in the autos sector.