Our analysis shows that for CPI inflation to get stuck above 2.0% it would require oil prices and UK wholesale gas prices to rise to $110 per barrel and 150 pence per therm respectively. And for CPI inflation to return to 5.0%, it would require increases to $150pb and 300p/therm. These are upside risks to our forecast for CPI inflation to fall from 3.4% in February to below 2.0% in April and to just 0.5% later this year.
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