United Kingdom: Inflation rises to over one-year high in April
Latest reading: Inflation came in at 3.5% in April, up from March’s 2.6%. April’s result marked the highest inflation rate since January 2024 and was above market expectations. Looking at the details of the release, prices for food, transport, recreation and utilities rose at a quicker pace in April compared to the previous month. Transport inflation was boosted by higher taxes on electric vehicles, utilities inflation by the rise in the price cap on energy bills, and recreation by the timing of Easter this year vs last.
Annual average inflation edged up to 2.5% in April (March: 2.4%). Meanwhile, core inflation rose to 3.8% in April from the previous month’s 3.4%.
Finally, consumer prices increased 1.24% in April over the previous month, picking up from March’s 0.35% rise. April’s figure was the highest reading since October 2022.
Panelist insight: Digging deeper into the data, Nomura analysts said:
“A large part of the rise in UK inflation in April can be explained away with volatile components, administered prices and (probably) the timing of Easter all playing significant roles. […] Removing non-private rents, sewerage, other personal transport (which includes vehicle excise duty) and transport service prices (which include airfares) – the remainder worth around 43% of the CPI basket – underlying services inflation still looks stubbornly high.”