(MENAFN) According to data released by the Office for National Statistics (ONS) on Wednesday, the United Kingdom's consumer price index (CPI) experienced a decrease to 8.7 percent in annual terms in April. However, despite this decline, the inflation rate remains higher than anticipated. This marks the first time since August of the previous year that the CPI has fallen below 10 percent. Nevertheless, it still stands as the second-highest among Western European countries, trailing only Austria. Notably, the figure surpasses the forecast of the Bank of England (BoE), which projected a drop to 8.4 percent for April.
The ONS report highlights the contribution of electricity and gas prices to the decline in annual inflation, accounting for a decrease of 1.42 percent. This reduction is attributed to the comparison with the corresponding period last year when prices had risen. However, even with this decline, electricity and gas prices still contribute significantly, accounting for 1.01 percent of the overall annual inflation rate. Additionally, the report mentions a slight slowdown in the increase of food and non-alcoholic beverage prices, which only marginally decreased from 19.2 percent in March to 19.1 percent in April. This figure remains the second-highest recorded in over 45 years.
Despite the dip in headline inflation, there is a notable rise in core inflation, a crucial indicator that excludes volatile elements such as energy, food, alcohol, and tobacco prices. In April, core inflation increased by 6.8 percent, reaching its highest level since 1992. This surge in core inflation suggests that underlying pressures on the economy remain strong. As a result, experts suggest that this trend could lead to further interest rate hikes.
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