- CPI +2.8% vs +3.0% y/y expected
- Prior +3.3%
- CPI +0.7% vs +0.9% m/m expected
- Prior +0.7%
- Core CPI +2.5% vs +2.6% y/y expected
- Prior +3.1%
- Core CPI +0.7% vs +0.8% m/m expected
- Prior +0.4%
A note of this report from earlier: There will be more to the UK CPI report than what meets the eye later today
The monthly increases were much softer with services inflation only up 0.9% on the month, compared to the 1.2% estimate expected. Put together with the caveats pointed out in the linked post above, that is making for a softer read as a whole on the annual estimate.
Of note, services inflation is the big one falling on the annual reading with it dropping to 3.2% (vs 3.5% expected) from 4.5% in March.
A lot of that is tied to one-off factors and base effects though, with the infographic below outlining the key caveats:
The detailed breakdown shows housing to be the biggest drag, making for a 0.4% decline in inflation. That largely ties to the drop in electricity and gas prices as noted above, with the price hike from water and sewage bills in April 2025 also being a notable base effect impact.
Besides that, airfares were also another major base effect drag with it falling by 3.3% in April this year as compared with a 27.5% jump in April 2025. ONS also notes that: “As the weight for this division increased notably between 2025 and 2026, this amplified the effect of the April 2026 monthly movement on the headline rate.”
As mentioned earlier, don’t take this to mean that the UK inflation trend is shifting despite the war. It is mostly just a blip amid other factors.
The big picture continues to be a bit more complicated and is one that will be engulfed by the dark clouds of higher energy prices arising from the prolonged US-Iran conflict.
