Inflation takes off on higher air fares and energy prices
The Consumer Prices Index (CPI) was 2.1% in April.
UK inflation was higher in April, as the Easter getaway rush boosted air fares and the higher energy price cap was introduced.
Figures from the Office for National Statistics (ONS) show the Consumer Prices Index (CPI) was 2.1% last month compared with 1.9% in March.
Economists had been expecting inflation to rise to 2.2%.
It is the first time in 2019 that the rate has risen above the Bank of England’s 2% inflation target.
Household bills were one of the main contributing factors to the higher rates, after increases to Ofgem’s energy price cap came into effect.
Electricity and gas prices rose 10.9% and 9.3% respectively between March and April.
— Office for National Statistics (@ONS) May 22, 2019
Our latest consumer price inflation figures have been published today https://t.co/EyyOd7cUBu
Transport costs were also higher, especially for flights, due to the timing of Easter. Coming at the end of the month, the holiday helped to push air fares up by 26.4%.
But travellers also paid more for other forms of transport, with international rail, coach and sea fares all rising.
However the timing also contributed to a downward effect from hotels, where the cost of overnight stays rose by less than a year ago.
Meanwhile, drivers faced higher costs at the pumps as motor fuel prices rose.
Petrol prices rose by 3.8p on the month to 124.1p per litre. This was a bigger rise than the same time last year, when prices were up 1.5p.
Diesel was also pricier, climbing 2.3p to 133p per litre.
The largest downward contribution came from recreation and culture, especially in the volatile computer games category. Prices for games are calculated based on the bestseller charts, meaning they can vary depending on the number and popularity of new releases.
Prices in the games, toys and hobbies category were down 5.8% on the month, compared with a smaller decline of 1.6% last year.
Cigarettes and beer, especially cans of lager, also had lower prices. The wider alcohol and tobacco category was down 0.4%, despite a 2.1% uplift in the price of spirits.
The CPI, including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 2% in April, up from 1.8% in March.
The Retail Prices Index (RPI) was 3%, up from 2.4% in February.
Higher inflation would usually bring pressure on the central bank to raise interest rates – but these are far from normal times Ben Brettell, Hargreaves Lansdown
Ben Brettell, senior economist at Hargreaves Lansdown, said the inflation rate had received a muted reaction from the markets, and may have little weight in the Bank of England’s decision on whether to raise interest rates.
“Higher inflation would usually bring pressure on the central bank to raise interest rates – but these are far from normal times,” he said.
“The MPC is rightly reluctant to tweak policy while Brexit hangs over the economy like the Sword of Damocles.”