UK: Special one-off factors were the theme of April’s inflation report – TDS

Research Team at TDS, suggests that special one-off factors were the theme of April’s inflation report, with headline inflation rising 0.3%, significantly below consensus and our forecast, while core inflation rose 1.2% (also weaker than expected).

Key Quotes

“Declines were seen in airfares in particular, as increases due to the March Easter holiday unwound, while declines in gas prices were less than we expected (as were increases in tobacco prices). Clothing/footwear and housing/household services prices were also weak in the month, with the weakness in clothing prices likely impacted by the very cold April weather.

The MPC had forecasted a print of 0.3% y/y for headline inflation, so today’s print should have little implication for policy, and in any case, the MPC has stated that they will downplay any weak economic data ahead of the June 23rd referendum.”