MNI DATA IMPACT: UK CPI Above Target As Air Fares Take Off>

By Les Commons, Laurie Laird and Shaily Mittal

     LONDON (MNI) - April consumer price inflation exceeded the Bank of 

England's 2.0 target for the first time since December, and the recent 

surge in crude oil prices could further elevate inflation in months to 

come. 

     The following are the key points from UK inflation and public 

sector borrowing data published Wednesday by the Office for National 

Statistics. 

     - Consumer price inflation rose to an annual rate of 2.1% in April, 

falling short of the MNI forecast of a 2.2% rise. One-off factors, such 

as rising air fares and the lifting of energy price caps accounted for 

the bulk of the increase. 

     - However, rising crude oil prices could keep inflation above 

target in the months to come.  Input price inflation accelerated to an 

annual rate of 3.8% in April, from 3.2% in March, largely due to oil 

prices. 

     - London house prices retreated by an annual rate of 1.9% in March, 

although the intially-reported plunge in February was revised upward. 

Prices in the capital have not recorded an increase in 13 months, for a 

cumulative decline of 5.2%. 

     - RPI rose by a whopping 1.1% between March and April, the second 

biggest monthly increase since 1994, compared to a 0.6% monthly rise in 

the CPI, highlighting the disparity between the two measures of 

inflation.

     - However, the ONS would not comment on "ongoing discussions" 

regarding the use of RPI, saying only that any announcement on 

de-coupling the RPI from index-linked assets is unlikely to come before 

June.  

     - Public sector borrowing fell by 43.7% in the 2018/19 fiscal year 

to Stg23.5 billion, down from the initially-reported Stg24.7 billion. 

However, the dramatic improvement in the government's finances may be 

slowing, with April borrowing falling only slightly to Stg5.831 billion 

from Stg5.864 billion.