UK inflation drops below 10% for first time since August


UK inflation data paints a picture of the UK economy.

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LONDON — UK inflation fell sharply in April as energy prices retreated and the impact of Russia’s invasion of Ukraine began to fade from the annual comparison of consumer price.

Headline CPI inflation stood at 8.7% year-on-year, the Office for National Statistics said on Wednesday, down from 10.1% in March, but above a consensus estimate of 8 .2% of a Reuters poll of economists.

“Electricity and gas prices contributed 1.42 percentage points to the fall in annual inflation in April, as last April’s rise was removed from the annual comparison, but this component still has even contributed 1.01 percentage points to annual inflation,” the ONS said in its report.

“Food and non-alcoholic beverage prices continued to rise in April and contributed to high annual inflation, however, the annual inflation rate for food and non-alcoholic beverages declined from 19.2% year to March 2023, at 19.1% year to April 2023.”

On a monthly basis, consumer prices rose 1.2%, above a consensus estimate of 0.8%.

The consumer price index, including homeowners’ housing costs (HICP), increased by 7.8% in the 12 months to April 2023, from 8.9% in March , while the core CPI (excluding volatile energy, food, alcohol and tobacco prices) increased by 6.8%%, compared to 6.2% in March, which will concern the Bank of England.

UK inflation remained stubbornly high even as the economy defied expectations of a recession, prompting the Bank of England to raise interest rates for the 12th consecutive time to 4.5% in its last meeting at the beginning of the month.

Economists generally expect a further rise at its next meeting as inflation remains more sticky in the UK than in major peer economies, while the labor market remained tight and Governor Andrew Bailey has warned of spiraling wage prices.

On Tuesday, Bailey acknowledged to lawmakers that there were “very big lessons to be learned” from the Bank’s failure to predict the strength and persistence of inflation.

As UK households continue to face high food and energy bills, workers in various sectors have launched mass strikes in recent months amid disputes over pay and conditions.

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