2018.05.2320:31:00UTC+00UK Inflation Drops in April

UK inflation suddenly dropped further in April to its lowest level in over a year as lower airfares provided some relief for cash-strapped Britons. Following the release of the data, the pound slumped to its lowest level in 2018.

According to data from the Office for National Statistics, the annual change in the consumer price index declined to 2.4 percent during the month of April, from 2.5 percent in March. Economists had forecast it would remain unchanged.

Sterling fell following the release, with the pound trading down as much as one percent versus the dollar to around $1.3303, the lowest level since December 2017.

This decline will be welcomed by consumers under sharp pressure from rising prices since the Brexit vote, when a sudden drop in the value of the pound pushed up the cost of imported goods. While the impact from sterling's fall has started to fade, economists reckoned higher fuel prices would force inflation to remain above the Bank of England's target of 2 percent.

The ONS said airfares provided the biggest downward contribution for inflation, although it warned this was primarily down to Easter falling early in the month – a factor that could distort the inflation reading. Lower airfare prices were partially offset by rising petrol prices during the month.

Chancellor Philip Hammond welcomed the fall in inflation, saying on Twitter: “Good news on inflation this morning — it fell to 2.4 percent in April and is expected to keep falling. With wages going up that means more money in people's pockets.”