Consumer prices rose 0.4 percent on the month in April. This was slightly short of market expectations and small enough to shave a tick off the annual inflation rate which now stands at 2.4 percent, its lowest reading since March 2017. Headline inflation has now declined for three successive months and is some 0.7 percentage points below its recent peak in November 2017.
There was also good news on core prices which similarly showed a 0.4 percent increase from March. This made for a 2.1 percent 12-month rate, a 0.2 percentage point dip from last time and, similarly, the weakest print in more than a year.
The main downward contribution to the monthly change in the annual CPI rate came from transport. Here, Easter timing effects were key and saw air fares falling 0.2 percent on the month compared with an 18.6 percent jump over the same period a year ago. Clothing and footwear (0.4 percent versus 1.1 percent) also had a negative impact and, to a lesser extent, food and drink. A partial offset was provided by communications where telephone equipment gained a monthly 0.4 percent compared with a 1.0 percent drop last year.
Today's headline inflation rate matches the BoE MPC's latest forecast and so does nothing to undermine their decision earlier this month to leave policy on hold. The overall rate is clearly still above target but another dip in the core suggests that underlying trends are moving in the right direction. Certainly, it makes it all the harder for the hawks to justify any fresh call to tighten at the next meeting in June.