Some good economic news: Inflation drop is bigger than expected
This article may provide some basic cheer in terms of inflation but makes me reflect more sadly on the fact that, taking a longer term perspective, there is no doubt that rising fuel prices have really impacted on rural fuel poverty over the 3-5 few years. It tells us:
Falling prices at the petrol pumps led to a bigger-than-expected drop in inflation in April, the first easing in the annual rate of price rises for six months.
The Office for National Statistics (ONS) said consumer prices index (CPI) inflation dipped to 2.4 per cent in April, from 2.8 per cent in March, as lower fuel costs and air fares pushed overall transport prices down for the first time in almost four years.
But the temporary dip in inflation triggered by weaker commodity prices will do little to ease the financial pain on households, with inflation expected to spike above 3 per cent in the summer.
The pace of the fall surprised economists, who had expected CPI inflation to edge down to about 2.7 per cent in April.
Howard Archer, economist at IHS Global Insight, said: “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.”
But Alan Clarke at Scotiabank said while it was a “big downward surprise”, much of the fall is likely to be temporary.
The Treasury said it was “good news for families and businesses”, adding the economy is “healing”.
Plunging global commodity markets have hit the price of Brent crude oil in recent weeks, driving petrol and diesel costs lower.