Consumer prices index inflation dropped to 2.4 per cent during April as transport costs fell.
Data from the Office for National Statistics shows CPI inflation rose by 2.4 per cent last month, down from the 2.8 per cent recorded in March. The Bank of England’s CPI target rate is 2 per cent.
Economists had expected CPI inflation to fall to 2.6 per cent over the month.
The ONS says “by far” the largest downward contribution on inflation came from transport costs, most notably in motor fuels and airfares. Food and non-alcoholic beverages exerted the only notable upward contribution.
The ONS says: “This is the first time the growth in inflation has slowed since autumn 2012. Over the last six months, the CPI 12-month rate has been particularly stable.”
In his final inflation report last week, Bank governor Mervyn King said CPI should drop to its target of 2 per cent within two years, while growth is expected to be “a little stronger” than previously forecast.
He said: “That is the first time I have been able to say that since before the financial crisis.”
Commenting on today’s CPI figures, IHS Global Insight chief UK and European economist Howard Archer says: “April’s marked drop in inflation to a seven-month low of 2.4 per cent is very welcome news, providing significant relief for both consumers and the Bank of England.
“This was the first time that inflation had fallen back since last September and gives incoming Bank of England governor Mark Carney greater scope for manoeuvre on monetary policy.
“Any easing back in inflation is welcome news for recovery prospects as it lifts consumers’ purchasing power and gives the Bank of England’s more room for manoeuvre on monetary policy.”