MNI 5 THINGS: UK CPI, CORE CPI Slip to 13-month Lows

By Jai Lakhani, Jamie Satchithanantham, Laurie Laird

     LONDON (MNI) - The following are the key points from the UK's April

inflation data, published Wednesday by the Office for National Statistics.

     - Both headline and core UK CPI posted downside surprises in April, each

falling to a 13-month lows. The 2.4% CPI outturn was below analysts'

expectations but matched the Bank of England's prediction laid out in its May

Quarterly Inflation Report.

     - Transport prices exerted the bulk of the downward influence, attributed

solely to an Easter base effect. Airfares dropped 0.2% m/m this April versus a

rise of 18.6% m/m a year ago. This effect should wash out next month.

     - Crude oil prices rose 19.9% on the year in April and contributed to the

uplift in input price inflation. Input PPI rose 0.9pp to 5.3%. For now, there

was no sign of an immediate pass-through - output PPI was unchanged on the year

at 2.7%. National statisticians could not be drawn on the typical pass-through

effect.

     - The fall in CPI may cheer the Bank of England, but recent sterling

weakness and a surge in crude oil prices could reignite consumer price inflation

in months to come.

     - London house prices fell for a second consecutive month, down 0.7% in

March -- the biggest fall since September 2009. No other region in the UK has

suffered a monthly fall in house prices since March 2017 when housing costs fell

in the North East.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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