Inflation fell in April to 2.3%

Inflation has fallen in April to 2.3%, its lowest rate in nearly three years and close to the Bank of England’s 2% target, latest data from the Office of National Statistics (ONS) has shown.

The ONS Consumer Price Index (CPI) has revealed its headline measure of inflation has fallen to 2.3% in April, down from 3.2% in March.

April’s drop in inflation has been driven largely by falling energy prices as a result of regulator Ofgem’s new price cap coming into effect at the start of the month. However, prices remain well above their summer 2021 when level inflation was last this low.

Rises in electricity and gas prices triggered by sanctions on Russian imports across Europe following its invasion of Ukraine had led to a cascade of price rises in other sectors as costs were driven up. As a result, inflation in other areas remains above the headline figure according to the ONS: across the service sector as a whole, the annual rate of inflation remains at 5.9%. Food prices at the supermarket, which have seen some of the steepest price rises over the past three years of high inflation, also continue to outpace the ONS’ CPI basket of goods as a whole, up 2.9% on the 12 months to April 2024, and 0.3% on the previous month.

Despite inflation approaching the Bank of England’s 2% target rate, higher levels of inflation in parts of the economy make any fall in interest rates unlikely when its Monetary Policy Committee next meet in June. Inflation data for May is also set to be published prior to the bank’s economists next decision on interest rates.

Political commentators have also acknowledged that the latest fall in inflation may bring forward the timing of the upcoming General Election should Rishi Sunak wish to take advantage of the positive economic news to launch his reelection bid.