PM Rishi Sunak delivers inflation respite for Britain, food prices fall but still remain high

In a moment of respite for UK Prime Minister Rishi Sunak, the country’s annual inflation rate dropped to a 13-month low of 8.7 per cent in April,from 10.1% in March, registering the biggest fall since the cost of living crisis began, but food prices still remainelevated at one of the highest levels in 45 years,according to official data.

The development bringing some respitecomes after months of post-pandemic cost-of-living crisis aggravated by war in Ukraine hadpushed up energy prices in one of the coldest winters in Europe in recent times.

Britain inflation data: What is the reading?

According to the UK's Office for National Statistics, the rate of price increases came down from 10.1 per cent in March,and the inflation in April is down under 10 per cent for the first time since August last year.

ALSO WATCH |UK inflation falls to 8.7% in April, food prices still remain high

At 8.7 per cent, it was at the lowest level since March last year, when the rate stood at 7.0 per cent.

"However, prices in general remain substantially higher than they were this time last year, with annual food price inflation near historic highs," said ONS chief economist Grant Fitzner in an official statement.

The rate at which food prices are rising fell for the second month in a row in May but remains ‘incredibly high’, says research firm Kantar.

Prices were up by 17.2% from a year ago in the four weeks to the middle of May, down from 17.3% last month, it said. Food price rises are expected to ease further later this year, it added.

UK inflation drop: What is the catch?

The inflation rate continues to remain above the Bank of England's (BoE) prediction for inflation of 8.4 per cent last month.

Britain's annual inflation rate in April was also the highest among the G-7 countries in the Group of Seven rich economies, which includeCanada, France, Germany, Italy, Japan and the United States.

Meanwhile, the target rate of 2.0 per cent remains very far off for the UK government. Prime Minister Rishi Sunak's government has said that the inflation may drop up to about 5.0 per cent by the end of 2023.

“Last month, the rate of inflation fell notably as the large energy price rises seen last year were not repeated... but was offset partially by increases in the cost of second-hand cars and cigarettes,” Fitzner added.

UK economy: Inflation numbers come after IMF U-turn

The data comes a day after the International Monetary Fund, in a major U-turn on its forecast for the UK economy, said that it expected growth this year just one month after predicting a contraction.

Britain's economy is expected to expand 0.4 per cent in 2023, the IMF said in its latest outlook document, which cited weaker energy prices.

The IMF ripped up its previous forecast in April for a 0.3-per cent contraction.

"The IMF said yesterday 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," UK finance minister Jeremy Hunt said following the release of inflation data on Wednesday.

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