UK inflation doubles to 1.5%

Inflation has jumped to 1.5% in the year to April, having climbed from 0.7% a month earlier, new figures published by the Office for National Statistics (ONS) have revealed.

On a monthly basis, the ONS reported that its Consumer Prices Index (CPI) rose by 0.6% in April, following a 0.3% increase in March.


The Consumer Prices Index including owner occupiers’ housing costs (CPIH) from the ONS also increased by 1.6% in the 12 months to April 2021, which was up from 1.0% growth to March. On a monthly basis, the CPIH rose by 0.7% in April, after a 0.2% increase in March.

The largest upward contributions to the CPIH 12-month inflation rate came from housing and household services (0.57 percentage points), and transport (0.56 percentage points).


Rising household utility, clothing, and motor fuel prices made the largest upward contributions to CPIH growth in April, which the ONS indicated were partially offset by a large downward contribution from recreation and culture.

Commenting on the data, AJ Bell financial analyst, Laith Khalaf, said: “Inflation has doubled, with price rises occurring in key areas where it’s hard for consumers to control spending, namely transport, clothing, and household energy.

“At current levels, inflation is nothing to fret about, but there is rising concern that the fiscal and monetary response to the pandemic has sown the seeds of an inflationary scare further down the road.

“For the moment, the Bank of England is dismissing consumer price increases as a natural bounce back from the depths of the pandemic last spring. But the economic recovery could be a Trojan horse, smuggling inflation into the UK, right under the nose of central bankers.”

Khalaf highlighted that the UK is still behind the US, where the latest inflation reading came in at 4.2%, and added that CPI inflation is still below the Bank of England’s 2% target.

“The Bank has made it clear that it will tolerate inflation rising modestly above target, without pulling the trigger on interest rate rises,” Khalaf said. “However, if inflation looks like it’s going to get a significant foothold, markets will take matters into their own hands and raise borrowing costs across the economy.”

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