Petrol price drop helps lower inflation rate

Inflation plunged to its lowest level for nearly four years last month due to tumbling fuel costs and energy prices, according to new figures.

The Office for National Statistics (ONS) said the Consumer Price Index (CPI) fell more than expected to 0.8% in April – the lowest level since August 2016 and down sharply on the 1.5% recorded in March.

Mosteconomistsexpected inflation to fall to 0.9%.

The ONS said average petrol prices dropped by 10.4p a litre between March and April – the biggest fall since unleaded petrol records began in 1990 – because of a global fall in demand and energy prices also pushed inflation lower as regulator Ofgem reduced its default tariff cap.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "While the coronavirus limited the availability of some goods and services, its effect on prices was more muted.

"Falling petrol and diesel prices, combined with changes to the domestic energy price cap were the main reasons for lower inflation in April.

"Games, toys and hobbies saw rising prices, perhaps as people occupied their time at home.”

He added: "Food prices grew no more quickly than other goods and services, though fresh vegetables did see stronger rises."

The figures showed some effects of the coronavirus crisis, with prices of fresh vegetables rising month-onmonth in April, possibly as retailers switched to Britishgrown produce amid the pandemic, according to the ONS.

Long-life products also saw price hikes last month as consumers stocked up for life in lockdown.