UK inflation eases again, but fashion prices are still rising

UK inflation continues to fall and while the price rises of the past couple of years mean many items are significantly more expensive than they used to be, at least price rises are moderating, as are some costs for businesses.

The Office for National Statistics said Wednesday that April’s Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3%, down from the 3.8% March rise. On a month-on-month basis, CPIH rose by 0.5% in April. It was still rising strongly (1.2%) in April 2023.

Meanwhile, the Consumer Prices Index (CPI) rose by 2.3% for April, down from 3.2% in March. The month-on-month figures as a rise of 0.3%.

The biggest impact on the numbers was made by falling gas and electricity prices.

That said, core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.4%, although this was at least down from 4.7% a month earlier.

Clothing and footwear prices continued to rises last month, but as with many other sectors, the rises were lower than they had been for some time.

CPIH inflation for the category was 3.7% year on year in April, down from 3.9% in March. And the month-on-month rise was only 0.4%, compared to a 0.7% increase in the same month last year.

That’s all good news, but the big question is whether the downward trend will continue or might be forced into reverse by global factors.

Alpesh Paleja, CBI Lead Economist, admitted that inflation was always set to fall this month without any government or bank of England intervention and that risks remain.

He said: “A big fall in inflation was always on the cards for April, given Ofgem’s 12% cut to the energy price cap. Households and businesses will welcome a more benign inflationary environment, but it’s worth noting that many will still be struggling with a high level of prices.

“The Bank [of England] will be mindful of growing upside risks to inflation in the near-term: with the growth outlook improving at home, and tensions in the Middle East threatening to stoke commodity prices and supply pressures globally.”