UK April Consumer Prices Index Inflation Tumbles to 2.3%

Published / Last Updated on 22/05/2024

The Office for National Statistics (ONS) has this morning released inflation figures for the UK for April 2024.

After March’s small fall from 3.4% pa to 3.2% pa, figures show that inflation tumbled a massive 0.9% to 2.3% pa.

These falls in prices were driven by significant falls in the costs of household services, energy, food and alcohol.  This does not mean prices are coming down, although energy costs are expected to go negative with real price falls in the summer.  That said, the real costs of actual housing (rents and mortgages) did increase as mortgage rates increase and rents keep climbing, albeit at a slower rate of increase.

This follows the pattern in the USA where inflation marginally fell in April to 3.4% pa from 3.5% pa.

RPI Falls by 0.9%

The old measure of inflation RPI, an arithmetical mean of the average prices of a basket of household spending (rather than the geometric mean for CPI) and still our preferred measure of real inflation, also fell dramatically to 3.3% pa in April from 4.2% pa in March.  RPI has fallen consistently over the last few months and is now also more than 50% lower than it was in September 2023.


Stock markets fell slightly on the news, but inflation falls were already priced in, and many were expecting a bigger fall in inflation hence stock markets pairing back a little.  That said, this news may give the Bank of England some flexibility to reduce interest rates at the next Monetary Policy Committee (MPC) meeting, but we suggest the MPC will need to see inflation back to trend growth at 2.0% pa before any rate cuts with all eyes now being on May’s inflation figures due in June.

Key dates for us all: 

  • Next ONS inflation report 19 June 2024.
  • Next MPC interest rate decision 20 June 2024.

This is going to be a tough call.  The Bank of England does not want to strangle the economy so much so that we tip back into recession by keeping interest rates high but with UK economic growth forecasts being revised upwards, the Bank may wish to keep a tighter hold.  Contrary to independent Bank policy, the Government will want to spread ‘the joy’ claiming that their economic policies have worked as we head towards a General Election.  Politics before the economy no doubt.   We have suggested all along that rates would fall in Autumn but with inflation now getting near to its 2.0% pa trend growth target and with an election looming, rates may be cut sooner in July depending upon May’s inflation figures on 19 June.

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