A customer looks at the products on a shelf in a supermarket on January 15, 2025 in London, England.
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The annual inflation rate of the United Kingdom reached 3.5% in April, reaching the expectations of analysts, according to the data published by the Office of National Statistics (ONS) on Wednesday.
The economists surveyed by Reuters had anticipated that the consumer price index would reach 3.3% in the twelve months until April.
The last data launch faces a recent trend of cooling inflation, with the price increase rate that slows down to 2.8% in February and 2.6% in March.
Central inflation, which excludes more volatile energy, food, alcohol and tobacco prices, increased 3.8% in the year until April, compared to 3.4% in the twelve months until March.
The greatest contributions ascending to the monthly change in the inflation rate come from housing and homes, transport and recreation and culture services. At the other extreme of the spectrum, the largest contribution, partially descending compensation was clothes and footwear, said the ONS in a press release.
Economists expected the increase, attributing it to a large extent to the increase in the price of the energy price linked to the maximum price that energy suppliers can collect, as well as a series of unique adjustments, including national tax risks and recent Wee in April, Easter holidays and recut.
The latest data “will form a relatively noisy report at a time when the Bank of England is trying to imagine what to do next,” said Julien Lafargue, head of the Barclays Private Bank market, on the day of comments by email.
“However, beyond the short -term distortions, we believe that the General Directorate of Travel for the United Kingdom inflation is less. This should provide the Central Espacio bank to consider at least a couple of more interest rate cuts this year, which supports Favraable.
British pound increased around 0.4% against the US dollar immediately after the annual inflation impression of the United Kingdom for April.
The British Chancellor, Rachel Reeves, said Wednesday that she was “disappointed” with the latest data and that “the cost of living pressures are still weighed in working people.”
Expectations of the Bank of England
The Bank of England had stated widely that it expected a 3.7% temporary increase inflation in the third quarter. That increase in price growth, said the monetary policy committee, would occur in part due to increases in energy prices and in some regulated prices, such as water invoices.
The planned inflation of the increase was not enough to deter BOE to reduce its key interest rate to 4.25% in its last meeting in early May, however, it occurred in certainty around the broader economic image.
The BOE at that time insisted that any additional interest rate cut would be “gradual and careful”, since it seems to reduce the inflation rate to its target or 2%. However, the rhythm of rates cuts could be subject to changes if US trade tariffs vain. They vain global demand and affect the growth of the United Kingdom more than expected.
There was a strange good news in the United Kingdom data front last week, with preliminary data of the quarterly gross domestic product (GDP) that show a growth of 0.7% in the first quarter.
Economists said it was unlikely that the impressive data were replicated in the second quarter, pointing out that the impression of the first quarter was largely the result that the activity was coming ahead of the possible US tariffs and the increase in national taxes.
