Skip to main content

News | Business | UK: UK inflation at four-year low as fuel prices fall

4-5 minutes - Source: BBC



Hand at petrol pump Image copyright Getty Images
The UK's inflation rate fell in April to its lowest since August 2016 as the economic fallout of the first month of the lockdown hit prices.
The Consumer Prices Index (CPI) fell to 0.8% from 1.5% in March, the Office for National Statistics (ONS) said.
Falling petrol and diesel prices, plus lower energy bills, were the main drivers pushing inflation lower.
But the prices of games and toys rose, which the ONS said may be due to people spending more time at home.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "While the coronavirus limited the availability of some goods and services, its effect on prices was more muted."
He said that food prices generally rose no more quickly than other goods and services, "though fresh vegetables did see stronger rises".
The ONS said average petrol prices dropped by 10.4p a litre between March and April - the biggest fall since unleaded petrol records began in 1990 - amid a slump in global oil prices.
Energy prices also pushed inflation lower as regulator Ofgem reduced its default tariff cap.
The ONS said clothes retailers, hit during the early days of the lockdown by weaker footfall and then the closure of outlets, resorted to more discount sales than usual to try to shift their stock.
Goods seeing upward pressure on prices included video games and consoles, board games and children's toys, the ONS said. And the price of knitting wool rose, another sign of the crafts and hobbies popular with people staying at home.
Long-life products - such as cook-in sauces and frozen fish - also saw price hikes last month as consumers stocked up for life in lockdown.

Better news for savers

Laura Suter, personal finance analyst at investment platform AJ Bell, said it was likely that as shops start re-opening retailers would deeply discount prices, putting further downward pressure on inflation.
She also pointed to positive news for savers. "For the first time in ages [savers] can now get above inflation interest rates on easy-access savings accounts - from more than one account."
Most economists had expected inflation to fall to 0.9% last month, and have predicted the rate will fall further as the economic fallout of the pandemic continues. CPI is now far below the Bank of England's 2% target.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said inflation had taken a "big leap towards zero by the summer" as he said retailers were planning "further large price cuts".
He predicted inflation would recover next year but was likely to remain below 2% for much of 2021.
"The inflation outlook, then, supports the [Bank of England's] Monetary Policy Committee doing more to stimulate the economy at its next meeting in mid-June - we look for a further £100bn of quantitative easing to be announced," he added.
Core inflation, which excludes energy, food, alcohol and tobacco, held broadly steady at an annual rate of 1.5%.
Inflation as measured by the Retail Prices Index (RPI) - an older measure of inflation which the ONS says is inaccurate, but is widely used in bond markets and for other commercial contracts - dropped to 1.5% from 2.6%.

Comments

Popular posts from this blog

Analysis | The Cybersecurity 202: How the shutdown could make it harder for the government to retain cybersecurity talent

By Joseph Marks 13-17 minutes THE KEY President Trump delivers an address about border security amid a partial government shutdown on Jan. 8. (Carolyn Kaster/AP) The partial government shutdown that's now in its 18th day is putting key cyber policy priorities on hold and leaving vital operations to a bare bones staff. But the far greater long-term danger may be the blow to government cyber defenders' morale, former officials warn. With the prospect of better pay and greater job security in the private sector, more government cyber operators are likely to decamp to industry, those former officials tell me, and the smartest cybersecurity graduates will look to industry rather than government to hone their skills. That’s especially dangerous, they say, considering the government’s struggle to recruit and retain skilled workers amid a nationwide shortage of cybersecurity talent. About 20 percent of staffers are furloughed at the De

Democrats call for investigation into Trump’s iPhone use after a report that China is listening:Analysis | The Daily 202 I The Washington Post.

washingtonpost.com By James Hohmann _________________________________________________________________________________ President Trump and Chinese President Xi Jinping visit the Great Hall of the People in Beijing last November. (Andrew Harnik/AP) With Breanne Deppisch and Joanie Greve THE BIG IDEA: If Democrats win the House in two weeks, it’s a safe bet that one of the oversight hearings they schedule for early next year would focus on President Trump’s use of unsecured cellphones. The matter would not likely be pursued with anywhere near the gusto that congressional Republicans investigated Hillary Clinton’s use of a private email server during her time as secretary of state. Leaders of the minority party have higher priorities . But Democratic lawmakers made clear Thursday morning that they will not ignore a New York Times report that Trump has refused to stop using iPhones in the White House, despite repeated warnings from U.S. intelligence offici

RTTNews: Morning Market Briefing.-Weekly Jobless Claims Edge Down To 444,000. May 13th 2010

Morning Market Briefing Thu May 13 09:01 2010   Commentary May 13, 2010 Stocks Poised For Lackluster Open Amid Mixed Market Sentiment - U.S. Commentary Stocks are on pace for a mixed start to Thursday's session, as a mostly upbeat jobs report continued to relieve the markets while some consternation regarding the European debt crisis remained on traders' minds. The major index futures are little changed, with the Dow futures down by 4 points. Full Article Economic News May 13, 2010 Weekly Jobless Claims Edge Down To 444,000 First-time claims for unemployment benefits showed another modest decrease in the week ended May 8th, according to a report released by the Labor Department on Thursday, although the number of claims exceeded estimates due to an upward revision to the previous week's data. Full Article May 13, 2010 Malaysia's Decade High Growth Triggers Policy Tightening Malaysia's economy grew at the fastest pace in a decade in