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Economists had expected a slightly bigger slowdown to 2.1%.
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In the 12 months to April 2024:
Consumer Prices Index (CPI) rose by 2.3%, down from 3.2% in the 12 months to March.
Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3.0%, down from 3.8% in the 12 months to March.
➡️ https://t.co/MgOQsgwOkV pic.twitter.com/8Oof8bpYua
— Office for National Statistics (ONS) (@ONS) May 22, 2024
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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
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Inflation in the UK is expected to have slowed further, to an annual rate of 2.1% in April from 3.2% in March, figures from the Office for National Statistics are expected to show at 7am BST.
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Investec economist Ellie Henderson explains:
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1 April is frequently referred to as ‘National Price Hike Day’ due to firms and governments often increasing prices at the start of the new financial year. For example, in April we traditionally see price hikes in TV, broadband, train fares and water bills.
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But for inflation, what is key is the size of the monthly increase relative to last year. Although many consumers experienced large price rises in April, for the most part, these were smaller increases than last year, and thus will subtract from inflation.
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As such, we have many downward influences on inflation. But the largest by far stems from gas and electricity prices. In February Ofgem announced that its energy price cap would fall by 12% in April. This feeds mechanically into the inflation calculation and knocks 0.4 percentage points off headline inflation.
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But this effect is already baked in the pie, so to speak. The Bank of England knew when making its forecasts as part of the May Monetary Policy Report that there would be a large push lower due to energy. There are questions how prices in other sectors evolve, particularly within services, where inflation has remained particularly stubborn. Labour costs are key to this, and these would have risen for many firms in April due to the near 10% rise in the National Living Wage.
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We will also get UK public finance data for April at the same time.
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Later this morning, the former Post Office chief executive Paula Vennells will testify to the long-running Horizon inquiry. It is a moment wrongly convicted post office operators have waited years for. The inquiry is looking into how hundreds were pursued in the courts, fined and jailed over accounting shortfalls that were actually the fault of the Horizon IT system.
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Vennells, who held the top job between 2012 and 2019, has become the highest-profile face of the scandal since the ITV drama Mr Bates vs the Post Office galvanised public opinion when it was screened in January – despite her keeping a low public profile in the past decade.
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Jane Croft has looked at the key questions Vennells must answer. You can watch the hearing live here.
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The Agenda
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10am BST: Former Post Office CEO Paula Vennells to appear before Horizon inquiry
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9.30am BST: UK house prices/rents for April
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5pm BST: Deadline for BHP to make a firm offer for Anglo American or walk away
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7pm BST: US Federal Reserve Open Market Committee minutes
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important events
UK inflation slows to 2.3%
UK inflation fell to an annual rate of 2.3% from 3.2% in March.
Economists had expected a slightly bigger slowdown to 2.1%.
For the 12 months ending April 2024:
The consumer price index (CPI) rose 2.3%, down from 3.2% in the 12 months to March.
The consumer price index, which includes owner-occupied housing costs (CPIH), rose 3.0%, down from 3.8% in the 12 months to March.
➡️ https://t.co/MgOQsgwOkV pic.twitter.com/8Oof8bpYua
— Office for National Statistics (ONS) (@ONS) May 22, 2024
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For the 12 months ending April 2024:
The consumer price index (CPI) rose 2.3%, down from 3.2% in the 12 months to March.
The consumer price index, which includes owner-occupied housing costs (CPIH), rose 3.0%, down from 3.8% in the 12 months to March.
➡️ https://t.co/MgOQsgwOkV pic.twitter.com/8Oof8bpYua
— UK Office for National Statistics (ONS) (@ONS) May 22, 2024
Introduction: UK inflation expected to slow further in April
good morning. Welcome to our regular coverage of business, financial markets and the global economy.
UK inflation is expected to slow further, slowing to an annual rate of 2.1% in April from 3.2% in March, with Office for National Statistics figures due to be released at 7am BST.
Investec Economist Ellie Henderson I will explain:
April 1 is often referred to as “National Price Increase Day” because companies and governments often raise prices at the beginning of a new financial year. For example, April traditionally sees increases in TV, broadband, train fares and water prices.
However, what matters when it comes to inflation is the month-on-month increase compared to last year. Many consumers experienced significant price increases in April, but in most cases these were smaller increases than last year and will therefore be deducted from inflation.
So it has a lot of downward impact on inflation. But the biggest increase by far is due to gas and electricity prices. Ofgem announced in February that energy price caps would be cut by 12% in April. This is mechanically reflected in the inflation calculation, reducing headline inflation by 0.4 percentage points.
However, this effect is already baked in, so to speak. The Bank of England recognized that there would be a significant energy-driven decline when it produced its forecasts as part of its May Monetary Policy Report. There are questions about how prices will develop in other sectors, especially the services sector, where inflation has been particularly stubborn. Labor costs are key to this, and with the National Living Wage rising by nearly 10%, many companies should have seen their labor costs rise in April.
UK financial statistics for April will also be available at the same time.
Late this morning, former Postmaster General paula vennells He is scheduled to testify about the long-running Horizon investigation. It’s the moment wrongfully convicted post office operators have been waiting for years. The inquiry looks into how hundreds of people were pursued in court, fined and jailed over accounting flaws that were actually flaws in Horizon IT systems.
Mr Vennells, who held the top job from 2012 to 2019, has become the most high-profile face of the scandal since the ITV drama Mr Bates vs the Post Office galvanized public opinion in January. -Even though she kept her profile low in society. For the past 10 years.
Jane Croft considered the important questions Vennels had to answer. You can watch the hearing live here.
agenda
