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Industrial decline in the UK doubled to 1.5% in April as electricity prices rose


The rate of inflation in the UK doubled in April to 1.5% behind large oil prices and electricity and electricity bills, which are the highest since the onset of the coronavirus epidemic.

From 0.7% in March, consumer prices are similar to those of economists and the Bank of England, which see the move as part of the 2% inflation target at the end of the year.

The figures also show that inflation is kept relatively low due to the long-term 5% tax on hospitality taxes, which will continue until the end of September.

If taxes were the same, inflation, measured by the authors, would have risen to 3.2%, the highest price in nine years.

In contrast to the US, where high inflation rates reached 4.2% in April, UK figures are still not showing a sharp rise in prices, although economists say there are some concerns.

Prices for restaurants, hotel accommodations, and clothing have all risen sharply in April, after unnecessary shops reopened and hospitality centers were allowed to cater to foreign customers.

Samuel Tombs, a UK economist at Pantheon Macroeconomics, said the figures did not show any signs of worrying about reversing inflation in the US, but added that “CPI will continue to rise in the coming months as air travel, accommodation and package prices jump. for more and more consumers ”.

Many economists think Wednesday’s figures show that inflation is temporary and controlled. Ruth Gregory, the UK’s chief financial officer at consultancy Capital Economics, said inflation should rise above 2% of the target in the near future, but added: firms lower prices. ”

Prices for inflation, which does not include electricity, food, alcohol and tobacco, rose from 1.1% in March to 1.3 percent in April.

Andrew Bailey, governor of the BoE, said Tuesday that he was looking at the data “very carefully” to see the bank’s excessive evidence and would not hesitate to take action and establish financial policies if the risks became apparent.

Economists said April’s figures would not be enough to force the central bank to start raising interest rates from a historical 0.1% high.

One indication that there may be a higher price hike than the BoE expects is that the price of raw materials for goods and services from UK factories has risen sharply in April.

Chart of price changes for commodities from UK factories

The ONS said imports, covering oil and commodities, were 9.9% higher in April than last year, up from 6.4% in March and the highest in the country since February 2017.

Prices for commodities leaving the UK industry rose to 3.9% in April from 2.3% in March, a sharp rise in the price of electricity for timber, oil and other metals.


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