Retailers and manufacturers that use promotional and booklet labels on their products have been advised that inflation is likely to keep rising.

The Office for National Statistics surprised many analysts this week when it reported that the rate of inflation slowed from 4.4 per cent to 4 per cent in March 2011.

However, experts at the Ernst & Young ITEM Club have insisted that inflation is likely to "edge up a little" during the next few months.

Andrew Goodwin, senior economic advisor to the group, said this is partly because ongoing increases in the price of oil are starting to have an effect on other prices.

Nevertheless, he predicted that the rate of inflation is unlikely to reach the five per cent mark.

He added that the recent decline could ease some of the pressure on the Bank of England's Monetary Policy Committee ahead of next month's interest rate meeting.

At its most recent meeting, the group opted to leave interest rates on hold at their record low of 0.5 per cent.

Denny Bros Ltd, 14 April 2011