Inflation drops to lowest level in over a year during April

UK Consumer Price Inflation fell to 2.4% in April, it’s lowest level in over a year. The largest source of downward pressure came from air fares, as the Easter season was not included in April this year, while rises in motor fuel, recreation, and culture costs partially offset the fall.

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Some analysts said that the development further dented any residual hope that interest rates would be raised this year, but Nikesh Sawjani from Lloyds Bank disagreed:

“The impact of recent increases in oil prices and previously announced hikes in utility tariffs should ensure that inflation proves more ‘sticky’ than it has done so far this year. Against such a backdrop, and with the economy expected to recover in the second quarter, we expect the Bank of England to hike interest rates at its meeting in August”.