BREAKING

UK annual inflation slides to eight-month low

By Al Mayadeen English
Source: Agencies
24 May 2023 12:16

Britain's annual inflation rate fell sharply to an eight-month low of 8.7% last month.

A man walks past the Bank of England, at the financial district in London, Thursday, May 11, 2023. (AP)

The United Kingdom's annual inflation rate fell sharply to an eight-month low of 8.7% in April with weaker energy prices, official data revealed on Wednesday.

The rate of price increases decreased from 10.1% in March, pushing inflation under 10% for the first time since August last year, the Office for National Statistics stated. "However, prices, in general, remain substantially higher than they were this time last year, with annual food price inflation near historic highs," noted ONS chief economist Grant Fitzner.

April's rate was above the Bank of England's (BoE) prediction for inflation of 8.4% last month, despite the sharp drop. The annual inflation rate in April was also the highest in the Group of Seven rich economies, featuring Canada, France, Germany, Japan, Italy, and the United States.

As the UK government has said, it sees inflation dropping to about 5.0 percent, by year-end, while the BoE's target rate of 2.0 percent remains far off.

Last month, "the rate of inflation fell notably as the large energy price rises seen last year were not repeated... but was offset partially by increases in the cost of second-hand cars and cigarettes," Fitzner added.

One day after the International Monetary Fund delivered a major U-turn on its forecast for the UK economy, saying it was expecting growth this year, a month after predicting contraction. That said, the UK's economy is expected to expand 0.4% in 2023, the IMF noted in its latest outlook document, which cited weaker energy prices.

The IMF ripped up its previous forecast in April for a 0.3-percent contraction.

"The IMF said yesterday we've acted decisively to tackle inflation but although it is positive that it is now in single digits, food prices are still rising too fast," finance minister Jeremy Hunt said following Wednesday's data.