Britain’s annual inflation rate fell more than expected in April, largely due to a drop in energy prices in the months before the Middle East war, official data showed today.
The Consumer Prices Index rose by 2.8 per cent in the 12 months to April, down from 3.3 per cent in March, the Office for National Statistics (ONS) said in a statement.
Analysts’ consensus forecast had been for a slowdown to 3.0 per cent in April, reports AFP.
“There was a notable fall in annual inflation led by lower electricity and gas prices,” ONS chief economist Grant Fitzner said.
“This was due to the government’s energy bill support package… along with lower global wholesale energy prices before the conflict in the Middle East,” he said.
Responding to the data, analysts said they expected British inflation to shoot back up in the coming months after the US-Iran conflict sent oil and gas prices soaring.
“The drop in CPI inflation… feels like the lull before the storm,” said Ruth Gregory, deputy chief economist at Capital Economics research group.
“We expect inflation to hover around three percent until July,” she added.
Susannah Streeter, chief investment strategist at Wealth Club, said that while “the softer-than-expected inflation reading will come as welcome relief to policymakers and households… concerns remain that higher energy costs and geopolitical tensions could yet feed through into prices in the months ahead”.
