Economists cautious after inflation cools
Inflation unexpectedly eased last month but is likely to prove sticky for sometime, economists yesterday warned.
Official figures revealed that the Consumer Price Index ( CPI) fell to 2.4 per cent in April, from 2.5 percent a month earlier. Economists had expected an unchanged reading.
The fall came despite surging fuel costs and record price rises on soft drinks after the sugar tax came into force.
Mike Hardie, head of infla- tion at the Office for National Statistics, said: “Inflation continued to slow in April, with air fares making the biggest downward contribution, due to the timing of Easter. This was partially offset by the rise in petrol prices.
“Soft drink prices saw their biggest ever rise for this time of year, due to the introduction of the sugar tax. However, many retailers still haven’ t passed the impact of the tax on to shoppers.”
Howard Archer, chief eco - nomic advisor to the EY Item Club, said the fresh dip in inflation was “slightly surprising” but“very welcome news” for consumers and Bank of England policymakers.
However, he cautioned: “The recent rise in oil prices to a three-and-a-half-year high increases the risk that inflation will be stickier than expected in the near term at least, thereby slowing the improvement in consumer’s purchasing power.”
Calum Bennie, savings spe - cialis tat Scottish Friendly, said: “While savers may not be rejoicing at the fall in inflation, it does mean that the meagre interest rates they receive are not being diminished further.”