UK Inflation Rate Highest Since 2013
Consumer prices in the United Kingdom increased 2.7 percent year-on-year in April of 2017, following a 2.3 percent rise in each of the previous two months and above market expectations of 2.6 percent. It is the highest inflation rate since September of 2013, mainly due to rising air fares and electricity prices. The inflation rate has been on an upward trend since the Brexit vote last year due to a fall in the sterling value.
5/16/2017 8:52:50 AM
Year-on-year, main upward contributions came from prices of transport (6.4 percent vs 4.7 percent in March); restaurants and hotels (3.1 percent vs 2.9 percent); housing and utilities (1.6 percent vs 1.1 percent in March); food and non-alcoholic beverages (1.5 percent vs 1.2 percent) and clothing and footwear (2.4 percent vs 0.9 percent). In contrast, inflation slowed for recreation and culture (1 percent vs 1.6 percent) and miscellaneous goods and services (1.7 percent vs 1.8 percent).
On a monthly basis, consumer prices went up 0.5 percent, higher than 0.4 percent in March and forecasts of 0.4 percent. Air fares were the main contributors to the increase, although this balanced out a downward effect of similar magnitude in March 2017, due to Easter falling later than last year. Rising prices for clothing, vehicle excise duty and electricity also contributed to the increase in the rate. These upward contributions were partially offset by a fall in motor fuel prices between March and April 2017.
The core index which excludes prices of energy, food, alcohol and tobacco rose 2.4 percent year-on-year, the most since March of 2013 and above expectations of 2.2 percent.