Bankinter : UK inflation slows sharply in April, although it came out slightly higher than expected – CPI (April): +2.3% year-on-year versus +2.1% expected and +3.2% previously. Underlying: +3.9% vs +3.6% expected and +4.2% previously.
Assessment: Despite disappointing expectations, the deceleration is significant and this is good news on the UK inflation side. The price level decelerates for the second consecutive month, after stagnating at +4.0% at the beginning of 2024. The slowdown in April is significant, with the headline rate decelerating -0.9pp. UK CPI evolves in line with the BoE’s expectations. At the end of 2023, the central bank pointed to inflation slowing to the +2% threshold in Q2 2024, before accelerating again towards the end of 2024. This inflation record is the latest before the BoE meeting on 20 June and reduces the likelihood that the central bank will cut rates in June, as its governor had hinted at the last BoE meeting.
