The latest data from the Office for National Statistics (ONS) reveals that the UK's consumer price inflation experienced a modest decline in April, dropping to 8.7% from March's 10.1%. This decrease comes as a slight relief, as economists surveyed by Reuters had predicted a lower rate of 8.2% for April. It signifies a step further away from the peak reached in October, where inflation hit a 41-year high of 11.1%.
In a previous forecast, the Bank of England had estimated an inflation rate of 8.4% for April. However, core inflation, which excludes energy, food, and tobacco prices, exhibited a contrasting trend by rising to 6.8%. Despite this recent decline, the impact of inflation on workers' purchasing power remains noticeable, as wage growth continues to lag behind.
Attention now turns to the Bank of England's upcoming decision on interest rates, scheduled to be announced on June 22. The central bank's response to the inflation situation will be closely monitored, as policymakers aim to strike a delicate balance between supporting economic recovery and managing rising prices. The latest inflation figures provide a nuanced backdrop for their decision-making process, and all eyes will be on the bank's forthcoming measures to address this ongoing challenge.
