INFLATION has eased to its lowest level since March last year, although remained higher than expected with “prices still soaring”.
The Office for National Statistics (ONS) said that Consumer Prices Index (CPI) inflation fell to 8.7% in April, down from 10.1% in March, as last year’s energy price hikes were not repeated.
It marks the first time inflation has been in single digits since last August, although it was higher than forecast by economists, who had pencilled in a drop to 8.2% in April.
Commenting on the figures, the SNP’s economy spokesperson Stewart Hosie said: “Any slight dip in the UK’s sky-high inflation is to be welcomed but prices are still soaring – and the cost of living under Westminster control is still far too high for many families, who were already struggling to get by after 13 years of Tory cuts, Brexit and economic mismanagement.
“Under the Tories, the majority of families in the UK are worse off as wages fall behind the increasingly unaffordable cost of food, housing, bills and everyday essentials – showing exactly why Scotland needs to escape Westminster control as an independent country.”
Despite the fall in the rate of food CPI inflation, costs remain high. It fell to 19.3%, down only slightly on March’s eye-watering 19.6% figure.
Chancellor Jeremy Hunt said: “Although it is positive that it is now in single digits, food prices are still rising too fast.
“So as well as helping families with around £3000 of cost-of-living support this year and last, we must stick resolutely to the plan to get inflation down.”
The steep fall in CPI reflects last April’s sky high rise in energy bills dropping out of the calculation, with the energy price cap having jumped higher a year ago as wholesale prices rocketed after Russia’s invasion of Ukraine.
Last April, the energy price cap soared by 54% to £1971, but this year the Energy Price Guarantee (EPG) has been kept at £2500 since last October.
Ofgem is set to confirm on Thursday that energy prices will fall sharply for households in July, when the current EPG comes to an end.
Forecasters at Cornwall Insight are expecting the price cap to fall to £2053.77, below the EPG for the first time since it was introduced last October.
But inflation has been stubbornly higher than predicted, with the rate of food CPI the second highest for more than 45 years.
Shadow chancellor Rachel Reeves said: “As bills keep surging, families will be worried food prices and the cost of other essentials are still increasing.”
The Bank of England’s top bosses admitted to MPs on Tuesday that it made errors in its forecasting of UK inflation, but governor Andrew Bailey insisted that inflation had “turned the corner”.
It predicted earlier this month that inflation would fall to 5.1% in the fourth quarter of 2023, narrowly seeing the Government hit its target to halve inflation by the end of the year.
April’s big drop in the rate of inflation may take some of the pressure off the Bank to keep increasing interest rates, now at 4.5%, but Samuel Tombs at Pantheon Macroeconomics said it was “too small a drop for the MPC to stop hiking in June”.
The latest data also showed the CPI measure of inflation including housing costs (CPIH) fell to 7.8% in April from 8.9% in March, while the Retail Prices Index (RPI) slowed to 11.4% from 13.5% in March.
