UK Annual Inflation Rate Slides to 2.3% in April vs. 3.2% in March 2024
In April, consumer prices increased by 0.3% month-on-month after advancing by 0.6% in March. Economists expected consumer prices to rise by 0.2%.
According to the Office for National Statistics,
The Consumer Prices Index, including owner-occupier housing costs (CPIH), rose by 3.0% in the 12 months to April. (March: +3.8%).
- Gas and electricity price declines made the largest downward contribution to the CPIH annual inflation rate.
- The Core CPIH (excluding energy, food, alcohol, and tobacco) increased by 4.4% in the 12 months to April 2024. (March: 4.7%).
- The owner occupiers’ housing costs (OOH) component of CPIH advanced by 6.6% (the highest since July 1992), up from 6.3% in March.
- Alcohol and tobacco price inflation declined from 11.9% to 8.0% in April 2024.
- Prices for food and non-alcoholic beverages softened from 4.0% to 2.9% in the 12 months to April 2024.
- Recreation and culture prices eased from 5.6% to 4.6%.
- Prices for communication declined from 7.6% to 4.1%.
The Consumer Prices Index, including owner-occupier housing costs (CPIH), rose by 0.5% in April 2024 compared with a 1.2% increase in April 2023.
Bank of England Monetary Policy Implications
The hotter-than-expected inflation numbers could introduce uncertainty regarding the potential for a June Bank of England rate cut. In April, the annual inflation rate remained above the 2% target, with core inflation at 3.9% likely to be a focal point.
GBP/USD Reaction to the March UK Inflation Report
Before the UK inflation report, the GBP/USD fell to a low of $1.27034 before climbing to a high of $1.27231.
