LONDON: The annual inflation rate in the United Kingdom fell drastically to a 13-month low of 8.7 percent in April, with energy prices much lower than a year earlier, according to official statistics released Wednesday.
The rate of price increases has dropped from 10.1 percent in March, bringing inflation below 10% for the first time since August of last year, according to the Office for National Statistics.
It was the lowest level since March of last year when it stood at 7.0 percent.
“However, prices, in general, remain substantially higher than they were this time last year, with annual food price inflation near historic highs,” said ONS chief economist Grant Fitzner.
Despite the significant decline, April’s rate was higher than the Bank of England’s (BoE) projection of 8.4 percent inflation last month.
In April, Britain’s annual inflation rate was also the highest among the Group of Seven rich economies, which included Canada, France, Germany, Italy, Japan, and the United States.
The Bank of England’s target rate of 2.0 percent remains very far away, while the UK government expects inflation to fall to around 5.0 percent by year’s end.
“The rate of inflation declined noticeably last month since the large energy price increases recorded the previous year were not replicated… “However, this was partially offset by increases in the cost of used cars and cigarettes,” Fitzner remarked.
The news comes just one day after the International Monetary Fund reversed its prognosis for the UK economy, stating it projected growth this year after expecting recession just one month before.
Britain’s economy is anticipated to grow by 0.4 percent in 2023, according to the IMF’s latest outlook statement, which noted lower energy prices.
The IMF revised its previous April prediction of a 0.3-percentage-point contraction.
“The IMF said yesterday that we’ve acted decisively to tackle inflation, but while it’s encouraging that it’s now in single digits, food prices are still rising too fast,” finance minister Jeremy Hunt said after the statistics were released on Wednesday.