THE UK's headline rate of inflation has fallen for the first time since August, dipping to 8.7 per cent in April from 10.1 per cent in March, according to the Office for National Statistics (ONS).
But with food prices spiralling at their fastest rate in nearly 45 years last month, the consumer is unlikely to feel the benefits for some time yet, because it simply means prices are not going up so quickly.
The drop was less than analysts' predictions of 8.2 per cent.
The drop is due to the fact that energy price rises are slowing from the extreme hikes seen a year ago after Russia, which is a major oil and gas producer, invaded Ukraine and was hit with sanctions.
But food costs are still 19.1 per cent higher than a year ago, the ONS says.
On Monday, Kantar said UK food price inflation remains at its third-highest level since the financial crisis, with groceries rising at an annual rate of 17.2 per cent, which is on average adding an extra £833 a year to shoppers’ bills.
Another stronger than expected CPI reading. UK CPI eased from 10.1% y/y in March to 8.7% in April. Markets expected 8.2%. Big concern is core CPI rose from 6.2% to 6.8%. Highlights underlying (ex food & energy) inflation getting worse.
— Richard Ramsey (@Ramseconomics) May 24, 2023
James Smith, research director at the Resolution Foundation think tank, said: “The cost-of-living crisis is evolving not ending with surging food prices now taking centre stage.
“Surging food prices are particularly painful for low-income families, three-in-five of whom are already reporting that they are having to cut back on food and other essentials.”
Alpesh Paleja, lead economist at business body the CBI, said: “Inflation should continue to fall in the months ahead, thanks to base effects unwinding further and a more benign outlook for global energy prices.
“But it’ll take a while for people to feel this in their pockets, particularly with food price inflation and generalised inflationary pressures still strong.”
He added: “Easing price pressures means that the Bank of England is probably close to the peak in its rate tightening cycle. But the stickiness in domestic price pressures, such as wage growth, is something that it is keeping a close eye on.
“Should this persist, especially against the backdrop of resilience in economic growth, it might prove too early to call time on rate rises just yet.”
Chancellor Jeremy Hunt said: “We’ve acted decisively to tackle inflation but although it is positive that it is now in single digits, food prices are still rising too fast.
“So as well as helping families with around £3,000 of cost-of-living support this year and last, we must stick resolutely to the plan to get inflation down.”
Shadow chancellor Rachel Reeves said: “As bills keep surging, families will be worried food prices and the cost of other essentials are still increasing.
“They will be asking why this government still refuses to properly tackle this cost of living crisis, and why they won’t bring in a proper windfall tax on the enormous profits of oil and gas giants.
“The reality is that never have people paid so much in taxes and got so little in return.
“Our economy is constantly lurching from crisis to crisis, when we should be protecting family finances and building our national economic security.”
Liberal Democrat Treasury spokeswoman Sarah Olney said the latest inflation figures were no cause for celebration.
“Inflation is soaring and food prices are still at eye-watering levels. People are worried that there is no end in sight for the cost-of-living crisis.
“It is shocking that the Chancellor refuses to act on food bills. These latest figures show the cost of shopping is through the roof, leaving families and pensioners to struggle on without any help.
“Conservative ministers have shown to be completely out of touch with the cost of food crisis. Enough is enough, we need action now.
“That means immediately expanding free school meals, giving farmers more support with their energy bills and cracking down on profiteering by big supermarkets and food multinationals.”
