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Economic news
22.05.2024

Consumer inflation in the UK slowed less than forecast in April

According to the report from the Office for National Statistics (ONS), in April consumer prices rose by 2.3% per year after an increase by 3.2% in March. The latest reading was the lowest since July 2021. Economists had expected inflation to slow to 2.1%. The ONS said that the largest downward contributions to the CPI annual rates came from gas and electricity prices, while the largest, partially offsetting, upward contribution came from motor fuels, with prices rising this year but falling a year ago. Investors are keenly watching the print, after Bank of England policymakers indicated they would be willing to cut interest rates some time in the summer, but stressed that the timing will depend on fresh data.

Meanwhile, core CPI - which excludes energy, food, alcohol and tobacco - rose by 3.9% per annum (the lowest rate since October 2021) after an increase by 4.2% in March. Consensus estimates suggested an increase by 3.6% per annum. On a monthly basis, core consumer prices rose by 0.9%, compared with the 0.6% increase in March and the market estimate of a 0.7% increase.

The data also showed that on a monthly basis, the consumer price index increased by 0.3%, slowing sharply compared to March (+0.6%). Economists expected a 0.2% increase.

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