Inflation falls to 8.7%

Inflation fell to 8.7% in April, according to the latest Consumer Price Index figures published today (24th May) by the Office of National Statistics (ONS).

The fall, down from 10.1% in March sees the measure of price increases drop back below double figures for the first time since September’s 9.9%, and now stands at its lowest rate in 12 months.

The decline in the rate of inflation is largely thanks to continued stabilisation in the energy markets, with household electricity and gas prices being compared against the higher price cap that was introduced in April 2022. Falling prices for motor fuels also helped bring down the overall measure of price rises: average petrol and diesel prices stood at 145.8 and 162.4 pence per litre, respectively in April 2023, compared with 161.8 and 176.1 pence per litre the previous year.

Despite the fall in the rate of price rises, shoppers are unlikely to notice the change in their weekly shop, with food and drink prices still 19.1% higher than this time last year. Modelling by the ONS estimates food prices are rising at their fastest rate since August 1977, with some categories including olive oil nearly 1.5 times more expensive than 12 months ago.

The easing of inflation in the UK tracks similar trends seen in other major economies, with the US and Germany both seeing inflation fall in April. Despite this, the UK is still recording higher inflation than other major economies, including neighbours France (6.9%), Germany (7.6%), the US (3.8%), with the average rate of inflation across the 27 EU member states also lower than in the UK (8.1%).

April’s CPI data saw the ONS refresh its shopping basket of the goods tracked each month to monitor inflation across the economy. Frozen berries, home security cameras and e-bikes were all added to the basket of over 700 items this month, with outdated technology including compact digital cameras and non-chart CDs omitted from the analysis.