UK consumer price inflation hits 3 percent in April, up from 2.5 percent in March.
Consumer prices in Britain shot up 3 percent in April compared with a year earlier, propelled by rising prices for home gas, electricity and heating oil, the government said Tuesday. The jump magnifies the contrary pressures on the Bank of England, which has been cautiously cutting rates to stimulate a slowing economy while seeking to hold inflation in check.
Underlining that dilemma, the British Retail Consortium reported Tuesday that sales fell 1.5 percent in April, the second consecutive monthly fall. The consumer inflation rate, which was 2.5 percent in March, is now a full point above the government's target.
The retail price index rose to 4.2 percent, compared with 3.8 percent in March, the Office for National Statistics said. Retail prices, excluding mortgage interest payments, rose 4.0 percent compared with 3.5 percent in March. Inflation rose to 4.2 percent in April, up from 3.8 percent in March.
"This is another horrible surprise on the inflation front," commented Howard Archer, chief European economist at Global Insight. He said it sharply reduced chances that the Bank of England would reduce its base lending rate from 5.0 percent next month.
Earlier, the British Retail Consortium reported that retail sales in April fell 1.5 percent below the same month last year. Tuesday's report was the second downbeat monthly result, after a 1.6 percent drop in March.
The consortium said clothing and footwear sales were hardest hit, but it did not release comparative figures. "The retail sales figures for April were worse than expected, impacted, we believe, not only by the weather but also a slowdown in spending," said Freddie George, analyst at Seymour Pierce in London.
Higher prices for food and fuel are eating into household incomes, many homeowners will be paying higher mortgage interest and unemployment is likely to rise, Archer said. "Likely further gradual Bank of England interest rate reductions will help the consumer, but will only partially offset these major headwinds," Archer said.
The Bank of England's base rate now is 5.0 percent, down from its recent peak of 5.75 percent in November.
Consumer prices in Britain shot up 3 percent in April compared with a year earlier, propelled by rising prices for home gas, electricity and heating oil, the government said Tuesday. The jump magnifies the contrary pressures on the Bank of England, which has been cautiously cutting rates to stimulate a slowing economy while seeking to hold inflation in check.
Underlining that dilemma, the British Retail Consortium reported Tuesday that sales fell 1.5 percent in April, the second consecutive monthly fall. The consumer inflation rate, which was 2.5 percent in March, is now a full point above the government's target.
The retail price index rose to 4.2 percent, compared with 3.8 percent in March, the Office for National Statistics said. Retail prices, excluding mortgage interest payments, rose 4.0 percent compared with 3.5 percent in March. Inflation rose to 4.2 percent in April, up from 3.8 percent in March.
"This is another horrible surprise on the inflation front," commented Howard Archer, chief European economist at Global Insight. He said it sharply reduced chances that the Bank of England would reduce its base lending rate from 5.0 percent next month.
Earlier, the British Retail Consortium reported that retail sales in April fell 1.5 percent below the same month last year. Tuesday's report was the second downbeat monthly result, after a 1.6 percent drop in March.
The consortium said clothing and footwear sales were hardest hit, but it did not release comparative figures. "The retail sales figures for April were worse than expected, impacted, we believe, not only by the weather but also a slowdown in spending," said Freddie George, analyst at Seymour Pierce in London.
Higher prices for food and fuel are eating into household incomes, many homeowners will be paying higher mortgage interest and unemployment is likely to rise, Archer said. "Likely further gradual Bank of England interest rate reductions will help the consumer, but will only partially offset these major headwinds," Archer said.
The Bank of England's base rate now is 5.0 percent, down from its recent peak of 5.75 percent in November.
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