UK Inflation Rises More Than Expected


UK consumer prices rose to an annual 1.8 percent in April of 2014, up from 1.6 percent in the previous month, driven by higher traveling cost during the Easter holidays.

By far the largest upward contribution to the change in the CPI 12-month rate between March and April 2014 came from transport prices. Air fares and sea fares were the two largest contributors to the rise, with prices increasing by 18 percent and 22 percent on the month respectively. This compares with a fall of 6 percent and a rise of 3 percent for air fares and sea fares on the month a year ago. The timing of Easter was likely a factor in both cases, with the Easter weekend falling within the April collection period for these services this year, but mainly missing the March and totally missing the April price collection periods a year ago. 

There was also a notable upward contribution from motor fuels with prices, overall, falling by less than a year ago. Petrol prices were unchanged between March and April this year compared with a fall of 2.1 pence per litre between the same two months a year ago. Diesel prices fell by 0.5 pence per litre this year compared with a larger fall of 3.9 pence per litre in 2013. 

The largest downward contributions to the change in the CPI 12-month rate between March and April 2014 came from food and non-alcoholic beverages. Overall, prices fell by 0.5 percent between March and April 2014 compared with a rise of 0.7 percent between the same two months a year earlier. The downward contribution came from a wide range of foodstuffs, most notably vegetables where there were reports of a better growing season this Spring, compared to last year when widespread frosts and poor weather impacted on the quality of the crop. Alcohol and tobacco rose at a slower rate than a year ago. The downward contribution came from most types of alcohol (with the notable exception of beer) and tobacco.

On a monthly basis, consumer prices rose 0.4 percent in April, accelerating from a 0.2 percent increase in the previous month.

Core CPI, which excludes food costs and other items, rose 2.0 percent, its highest rate since September of 2013. 

UK Inflation Rises More Than Expected


ONS | Joana Taborda | joana.taborda@tradingeconomics.com
5/21/2014 1:42:03 AM