United Kingdom: Inflation rises in April
May 22, 2019
Consumer prices rose 0.6% in April over the previous month, up from March’s 0.2% increase. April’s reading was underpinned by higher prices for housing and utilities, and transport.
Inflation increased from 1.9% to 2.1%, moving marginally above the Bank of England’s (BoE) 2.0% target but coming in slightly below market expectations of 2.2%. Core inflation—which excludes food and energy costs—was unchanged at 1.8%. April’s increase was likely driven in large part by the British energy regulator’s decision to increase energy prices by 10% from 1 April.
Looking ahead, while the energy price hike will provide some upward price pressure over the coming months, inflation is expected to remain close to the Bank’s target amid mild economic momentum.
UK Inflation Forecast
The Bank of England revised down its inflation projections in its May Inflation Report, and now sees inflation at 1.6% in Q4 2019 and 2.0% in Q4 2020. FocusEconomics Consensus Forecast panelists expect inflation to average 1.9% in 2019 and 2.0% in 2020.
Author: Oliver Reynolds, Economist