CPI inflation rate ticks up in April | EEF

CPI inflation rate ticks up in April

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ONS figures released this morning show the CPI inflation rate in the UK ticked up to 1.8% in the year to April, from 1.6% in the year to March.

The timing of Easter (which was in March last year and April this year) will have played a part in the rise in inflation, with transport costs such as air fares having increased between March and April 2014, compared with a fall between the same two months a year earlier.

Some other upward contributions to the rate of inflation were clothing and footwear; food and non-alcoholic beverages; and alcohol and tobacco.

Despite this month's rise in CPI, headline inflation is likely to remain relatively subdued for a number of reasons:

Strength of sterling - this reduces the price of imports, which should push down inflationary pressures. Import prices fell 5.9% in the year to April, the seventh consecutive month to show a fall in the annual rate.

Linked to this, the price of producer inputs has been falling. Producers' input prices fell 5.5% in the year to April. Prices for most inputs were falling over the 12-month period.

Wage growth remains relatively subdued. Although manufacturing pay growth was up 2.9% year on year in the three months to March, for the economy as a whole average weekly earnings only rose 1.7%.

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