UK inflation rate more than doubles in April
By Michele Maatouk
Date: Wednesday 19 May 2021
(Sharecast News) - UK inflation hit its highest level in more than a year in April amid higher household utility bills and clothes prices, according to figures released on Wednesday by the Office for National Statistics.
The consumer price inflation rate rose to 1.5% in the 12 months to April from 0.7% in March, coming in above expectations of 1.4% and marking the highest reading since March 2020. The rate of core inflation - which strips out volatile elements such as food and energy prices - increased to 1.3% from 1.1%.
On a monthly basis, CPI rose by 0.6% following a 0.3% increase in March.
ONS chief economist Grant Fitzner said: "Inflation rose in April, mainly due to prices rising this year compared with the falls seen at the start of the pandemic this time last year. This was seen most clearly in household utility bills and clothing prices.
"As the price of crude oil continues to rise, this has fed through to the cost of motor fuels, which are now at their highest since January 2020."
Capital Economics economist Ruth Gregory said: "Admittedly, inflation looks set to rise above the Bank's 2% target later this year for the first time since July 2019. But we doubt it will stay there long, as energy-related effects go into reverse next year, 'reopening' inflation eases and the stronger pound to pushes down on inflation.
"While upside risks remain, we suspect that it will only be in 2023 that the effects of a strong economic recovery will have a more sustained influence on inflation. As such, we think the MPC won't start tightening policy until 2024, much later than the markets expect."
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