United Kingdom: Inflation falls to seven-month low in April
May 21, 2013
In April, consumer prices added 0.2% over the previous month, which came in a notch below the 0.3% rise seen in March. The subdued increase surprised the market on the downside, as analysts expected prices to climb 0.4%. The reading mainly reflects higher prices for alcoholic beverages and tobacco as well as for health, which were partially offset by a drop in transport prices.
Building on the relatively subdued monthly reading, annual headline inflation dropped from 2.8% in March to 2.4% in April, which represents its lowest level in seven months. Furthermore, annual average inflation edged down from 2.7% in March to 2.6%.
In its latest inflation report from May, the Bank of England projects inflation to average 2.9% this year, before moderating to 2.5% in 2014. FocusEconomics Consensus Forecast panellists expect inflation to average 2.8% in 2013, which is unchanged from last month's forecast. For next year, the panel forecasts inflation to average 2.5%.