UK inflation slows to 8.7% in April

In April 2023, consumer prices rose by 8.7% year-on-year, according to the UK Office for National Statistics. Analysts expected a slowdown in price growth to 8.2%.

On a monthly basis, consumer prices rose 1.2% from a 0.8% rise in March. Experts, on average, expected the growth rate to remain at the level of the previous month.

Core inflation (CPI Core, prices excluding the cost of food, alcohol, tobacco and energy) increased by 6.8% y/y in April and by 1.3% m/m. In March, the first indicator grew by 6.2%, and the second – by 0.7%.

Growth in prices for food and non-alcoholic beverages slowed to 19.1% from 19.2% in March. The cost of utilities increased by 12.3%, transport – by 1.5%. Prices in restaurants and hotels increased by 10.2%.

Retail prices (RPI index) in April increased by 11.4% in annual terms (in March, the growth was 13.5%). It is worth noting that it is the RPI index that is used by British employers when negotiating wages. The difference in the dynamics of the CPI and RPI indices is due to the inclusion of housing costs in the RPI, as well as the different weight of airfares, insurance and gasoline prices.

On a monthly basis, the RPI rose 1.5% in April after rising 0.7% in March.