London
The Bank of England and the prime minister got walloped by April’s inflation figures, says Paul Dales of Capital Economics. Consumer prices were rising at 2.3% year on year that month, down from 3.2% in March, but nevertheless faster than expected. At least, the consumer price index (CPI) is now rising at its slowest pace since mid-2021 and now sits below the corresponding figures for the eurozone (2.4%) and the US (3.4%). On the other hand, much of the slowdown was due to energy bills falling 12% month on month, in line with the lower energy price cap that came in at the start of April. Food inflation also slowed from 3.9% to 2.8% (and a far cry from the 19% recorded a year earlier). But “most disappointing” was that services inflation, which covers 80% of output, fell by just 0.1 percentage points to 5.9%. This and the fall in core CPI (which strips out volatile food and energy prices) from 4.2% to 3.9% suggests businesses are passing on
