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| Inflation falls after drop in petrol prices and airfares | Inflation falls after drop in petrol prices and airfares |
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| Falling petrol prices pushed down UK inflation more than expected last month, bringing some relief to both households and Bank of England policymakers. | Falling petrol prices pushed down UK inflation more than expected last month, bringing some relief to both households and Bank of England policymakers. |
| The consumer price measure of inflation fell for the first time since last autumn and stood at 2.4% in April, down from 2.8% in March. The drop was driven by lower fuel costs and airfares as the oil price fell, more than offsetting a rise in food prices after damage to crops over the long winter, the Office for National Statistics (ONS) said. | The consumer price measure of inflation fell for the first time since last autumn and stood at 2.4% in April, down from 2.8% in March. The drop was driven by lower fuel costs and airfares as the oil price fell, more than offsetting a rise in food prices after damage to crops over the long winter, the Office for National Statistics (ONS) said. |
| Economists had forecast on average a rate of 2.6% for April and said the softer outcome would give incoming Bank of England governor Mark Carney more room to step in and shore up the recovery should growth falter. But many warned inflation could push higher again in coming months, which would intensify pressure on household budgets already stretched by meagre pay growth. | Economists had forecast on average a rate of 2.6% for April and said the softer outcome would give incoming Bank of England governor Mark Carney more room to step in and shore up the recovery should growth falter. But many warned inflation could push higher again in coming months, which would intensify pressure on household budgets already stretched by meagre pay growth. |
| "Any easing back in inflation is welcome news for recovery prospects as it lifts consumers' purchasing power and gives the Bank of England more room for manoeuvre on monetary policy. Even so, consumer price inflation of 2.4% in April is still putting an appreciable squeeze on households' purchasing power given that average weekly earnings actually fell 0.7% year-on-year in March and were up a mere 0.4% year-on-year in the three months to March," said Howard Archer, economist at IHS Global Insight. | |
| Inflation has been above the Bank's government-set target of 2% for more than three years and rose as high as 5.2% in autumn 2011. Tuesday's data show the first drop in the rate since last September but economists and the BoE predict it will tick higher again over the summer, partly as the downward effect of a period of falling fuel prices comes to an end. Between March and April this year, petrol and diesel prices both fell – by 2.1p and 3.9p a litre respectively – compared with rises of 3.2p and 2.1p a year earlier. | Inflation has been above the Bank's government-set target of 2% for more than three years and rose as high as 5.2% in autumn 2011. Tuesday's data show the first drop in the rate since last September but economists and the BoE predict it will tick higher again over the summer, partly as the downward effect of a period of falling fuel prices comes to an end. Between March and April this year, petrol and diesel prices both fell – by 2.1p and 3.9p a litre respectively – compared with rises of 3.2p and 2.1p a year earlier. |
| Samuel Tombs at Capital Economics explained: "Inflation still looks set to climb again in the coming months as we reach the anniversary of a period of falling petrol prices and deep discounting on the high street. However, the peak, probably in June, could now be closer to 3% than the 3.5% we had expected beforehand. What's more, underlying price pressures still look subdued." | Samuel Tombs at Capital Economics explained: "Inflation still looks set to climb again in the coming months as we reach the anniversary of a period of falling petrol prices and deep discounting on the high street. However, the peak, probably in June, could now be closer to 3% than the 3.5% we had expected beforehand. What's more, underlying price pressures still look subdued." |
| The ONS said core inflation, which strips out the erratic components of food and energy, fell to 2%, the softest since autumn 2009. Separate ONS data also showed factory gate inflation, which measures prices charged by producers, was the slowest since autumn 2009. | The ONS said core inflation, which strips out the erratic components of food and energy, fell to 2%, the softest since autumn 2009. Separate ONS data also showed factory gate inflation, which measures prices charged by producers, was the slowest since autumn 2009. |