United Kingdom: Inflation slows in April from the prior month
Latest reading: Consumer prices were up 2.8% on a year-on-year basis in April, following a 3.3% increase in the prior month. April’s reading was the weakest since March 2025 and below market expectations. However, it was still above the Bank of England’s 2.0% target.
Relative to the prior month’s figures, there were milder price pressures for recreation and culture (+1.7% on a year-on-year basis vs +2.7% in March), transportation (+4.5% vs +4.7% in March) and food and non-alcoholic beverages (+3.1% vs +3.7% in March).
Meanwhile, core consumer prices rose 2.4% in annual terms in April, following a 3.1% rise in the prior month.
Finally, consumer prices rose 0.75% in April on a month-on-month basis, following a 0.67% increase in the prior month.
Panelist insight: Digging deeper into the data, Nomura analysts said:
“This was always going to be an unusual CPI print, to the extent that various factors were pulling down on inflation despite the rise in wholesale energy prices. In particular, the Ofgem price cap (-6.3% m-o-m for household energy bills) was based on energy prices before the Iran war, and was lower in April than in January. That should, of course, be more than reversed in the July update (we expect around a 12% m-o-m rise at that point). And the erroneous and large rise in vehicle excise duty in April last year fell out of the annual comparison in today’s report, pushing inflation (and services inflation) further down.”