ECONOMISTS are forecasting that inflation will continue to outstrip wage growth when the latest figures are released next week.
It is expected that Tuesday's figures will show inflation remaining at a near four-year high as it stays above wage growth following the pound's plunge since the Brexit vote.
Investec economists believe consumer prices index (CPI) inflation will stay at 2.7 per cent in May as a fall in petrol prices offsets surging energy and food costs, which have been pushed higher by weak sterling.
Philip Shaw at Investec said that this month a number of factors are influencing the targeted measure.
"Utility price hikes, notably electricity, plus ongoing food price acceleration are likely to put upward pressure on inflation. By contrast we note that petrol prices slipped back by around 2 per cent."
He added that air fares are also set to keep a lid on CPI for now, as the Easter holiday effect disappears.
CPI hit 2.7 per cent in April, marking its highest level since September 2013 and overtaking wage growth, which rose by 2.1 per cent in the three months to March.
The inflation rate may also have an bearing on the Bank of England interest rate, due to be announced on Thursday.
It is expected interest rates will remain on hold at 0.25 per cent, but the minutes of the rates meeting will be watched closely for the Bank's latest thinking on prospects for inflation and the pound following the shock General Election vote.
