GO
Loading...

Falling Petrol Prices Drive First Drop in UK Inflation Since Sept

Shannon Fagan | The Image Bank | Getty Images

British consumer price inflation fell last month for the first time since September, giving incoming Bank of England governor Mark Carney more leeway to support the economy should the recovery weaken.

Inflation eased to 2.4 percent in April from 2.8 percent in March, official data showed on Tuesday, a better reading that the 2.6 percent rate economists had forecast.

(Read More: High Inflation a 'Permanent Fixture' in the UK: Economists)

The main downward thrust came from petrol and diesel, which accounted for almost half the drop in the annual rate.

Inflation has been above the Bank of England's 2 percent target since the end of 2009 but the recent weakness in commodity prices has made policymakers more confident it will ease over the next two years.

(Read More: Short Story: Sterling Expected to Fall Further)

Core inflation, which strips out volatile food and energy components, dropped to 2.0 percent in April, the lowest since November 2009.

Separate data on producer prices mirrored the picture of easing price pressures. Annual factory gate inflation slowed to 1.1 percent in April from 1.9 percent in March, a much bigger drop than analysts had forecast.

Carney, currently head of Canada's central bank, replaces Mervyn King at the helm of the Bank of England in July. He has a reputation for monetary activism and has previously said he wants Britain's recovery to achieve "escape velocity".

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More

Europe Video

  • The FBI have stated that North Korea's government is responsible for the Sony attack. Neil Ashdown, deputy head of Asia analysis at IHS, weighs in, saying that it's difficult to "definitively attribute" a hacking attack to a particular group or state.

  • What were the main highlights of the EU Summit in Brussels? CNBC's Hadley Gamble gives you the lowdown.

  • Carnival Cruises earnings have beaten expectations in its fourth quarter, with lower fuel prices being a great help, says David Dingle, UK chairman of Carnival Cruises.