United Kingdom Inflation

United Kingdom

United Kingdom: Annual consumer prices fall for the first time since 1960

May 19, 2015

In April, consumer prices rose 0.2% over the previous month, which matched March’s result. The figure reflected that higher prices for motor fuels and food more than offset lower prices for gas and clothing.

Consumer prices fell 0.1% over the same month of last year, which was down from the flat reading observed in March. This is the first time that annual consumer prices fall since 1960. April’s drop was below the flat reading expected by the markets. Annual average inflation fell from 1.1% in March to 0.9% in April, thus marking the lowest reading since April 2001.

In its latest inflation report from February, the Bank of England projected that inflation will average 0.2% in 2015 and 1.5% in 2016. FocusEconomics Consensus Forecast panelists expect inflation to average 0.4% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, the panel forecasts that inflation will average 1.6%.

Author:, Senior Economist

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United Kingdom Inflation Chart

United Kingdom Inflation April 2015

Note: Annual and monthly variation of consumer price index in %.
Source: Office for National Statistics (ONS) and FocusEconomics calculations.

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