UK Inflation Falls To Lowest In 12 Months
According to the Office for National Statistics (ONS), the consumer price index (CPI) fell to 2.4% last month down from 2.5% in March.
April’s CPI is also the lowest recorded since March 2017 but economists expected inflation to stay steady at 2.5%.
According to the ONS, soft drink prices up by 2.8% month-on-month and 6.2% year-on-year after government’s sugar tax came into effect on April 6.
However, many retailers have not passed on the cost of the tax to consumers yet while some of the retailers increased prices in advance.
Due to the early timing of Easter, air fares had downwards pressure on inflation in April with fares dropping 7.9% year-on-year and by 0.2% between March and April.
Clothing prices climbed 1.7% year-on-year, and overall food prices rose 2.3% year-on-year.
“Inflation continued to slow in April, with air fares making the biggest downward contribution, due to the timing of Easter. This was partially offset by the rise in petrol prices,” ONS head of inflation Mike Hardie said.
“Soft drink prices saw their biggest ever rise for this time of year, due to the introduction of the sugar tax. The impact of the tax on to shoppers still hasn’t passed by many retailers.”
The updated inflation prompted the pound to slide 0.6% against the US dollar to $1.33 and against Euro it was down 0.1 at €1.14.
In mean time the Bank of England decided to hold rates at 0.5% in May. It was backing an expected hike after a sharp slowdown in growth at the start of the year.