UK inflation fell to 2.4 per cent last month, down 0.4 per cent on a month earlier and hitting a seven-month low, according to figures released today.
Low fuel prices drove inflation downwards over the month, the Office for National Statistics announced, as the price of petrol and diesel decreased by 2.1 pence and 3.9 pence per litre respectively between March and April.
However, the rise of food prices continued as cold weather impacted crop production, helping keep inflation from falling by a greater margin.
Financial analyst firm Shore Capital noted that it “had been cautious on the UK consumer” in recent months considering rising oil prices and a potential drop in sterling, though a possible upside has recurred as inflation remains low and credit availability for housing market transactions expands.
Shore Capital‘s Gerard Lane explained: “We anticipate that if the CPI fuel measure continues to decline then the backdrop for UK consumer spending will improve, and the general retail sector can continue its outperformance.”
Meanwhile, the Retail Price Index dipped 0.4 per cent compared with March to 2.9 per cent in April, allowing incoming Bank of England Governor Mark Carney, who takes over from Sir Mervyn King in June, a strong opportunity to stimulate the British economy.
King yesterday urged his successor to work closely with the “strong team of people” at the Bank, Reuters reported, and not to focus on noting for how long interest rates will remain low.
He said: “What none of us can know of course, is what the right decisions will be down the road.
“They will have to made month-by-month, according to how the economy develops, and I am sure that they will make the right decision.”