May 25, 2023
According to the Office for National Statistics, headline CPI inflation in the United Kingdom fell significantly in April, coming in at 8.7% y/y.
The British economy has resisted predictions of a recession as inflation has stayed persistently high.
According to Suren Thiru, director of economics at the Institute of Chartered Accountants in England and Wales, “the drag on customer demand from a cooling jobs market, higher taxes, and the lagged impact of rising interest rates may mean that inflation falls more quickly than the Bank of England has forecast.”
As oil costs fell and the effects of Russia’s invasion of Ukraine started to fade from the yearly consumer price comparison, U.K. inflation plummeted precipitously in April.
Headline According to the Office for National Statistics, CPI inflation came in at 8.7% year over year on Wednesday, down from 10.1% in March but above the consensus expectation of 8.2% from a Reuters survey of experts.
“Electricity and gas prices contributed 1.42 percentage points to the fall in annual inflation in April as last April’s rise dropped out of the annual comparison, but this component still contributed 1.01 percentage points to annual inflation,” the ONS stated in its report.
Although the annual inflation rate for food and non-alcoholic drinks slowed from 19.2% in the year to March 2023 to 19.1% in the year to April 2023, prices continued to grow in April and contributed to high annual inflation.
The annual inflation rate for food and non-alcoholic beverages was still the second-highest observed in more than 45 years, according to the ONS’s indicative modelled projections.
While the core CPI—which excludes volatile energy, food, alcohol, and cigarette prices—increased by 6.8%, up from 6.2% in March, the Consumer Prices Index including owner occupiers’ housing expenses (CPIH) climbed by 7.8% in the 12 months to April 2023, down from 8.9% in March. This will worry the Bank of England.
Source: CNBC
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