UK 12-month inflation rate soars to 1.5 pct in April amid lockdown easing

2021-05-19 15:35:53 GMT2021-05-19 23:35:53(Beijing Time) Xinhua English

LONDON, May 19 (Xinhua) -- Britain's Consumer Prices Index (CPI) rose by 1.5 percent in the 12 months to April, up from 0.7 percent growth to March, the British Office for National Statistics (ONS) said Wednesday.

Although the reading in April was more than double on the previous month, it remained below than the Bank of England's two percent target for inflations.

On a monthly basis, the CPI rose by 0.6 percent in April amid the easing of lockdown restrictions, following a 0.3 percent increase in March, said the ONS.

Meanwhile, the CPI including owner occupiers' housing costs (CPIH) rose by 1.6 percent in the 12 months to April, up from 1.0 percent growth to March, said the ONS.

The rising household utility, clothing, and motor fuel prices made the largest upward contributions to CPIH growth in the month, and these were partially offset by a large downward contribution from recreation and culture, said the ONS.

James Smith, a developed markets economist at financial services firm ING, said just like about every country, Britain's inflation rate jumped in April on pandemic-related base effects, because "we're now comparing prices to the depth of the COVID-19 crisis last year."

Smith expected the inflation to "edge higher again next month, and reach two percent for the first time over the summer, before remaining there through the fourth quarter and first quarter of next year."

Meanwhile Ruth Gregory, a senior UK Economist in Capital Economics, an economic research consultancy based in London, said the inflation jump "was almost entirely driven by energy price effects, which will only be temporary."

"We doubt a sustained increase in inflation that would concern the Bank of England will happen until late in 2023," Gregory added.

"The upshot is that the Bank of England is unlikely to be under any immediate pressure to begin a tightening cycle, particularly given that its QE (quantitative easing) expansion is already slated to stop at the end of this year," said Smith, "we expect the first rate hike in 2023."

Trades Union Congress, representing the majority of trade unions in Britain, tweeted that "despite the rise, inflation is below target and we're a long way from giving workers security with a fast and full recovery."

Urging more investment to underpin the economy, the union said "much greater investment is still needed to regenerate the economy with green industry -- and to level up every part of the UK."

The lockdown further eased on Monday across Britain despite concerns over risks posed by coronavirus variants, as pubs, bars and restaurants in England were permitted to open indoors. Indoor entertainment was also resumed, including cinemas, museums and children's play areas.

In Scotland, except in Glasgow and Moray due to spikes of cases, people can meet indoors in groups of six from up to three households while pubs and restaurants can serve alcohol indoors until 22:30 BST (2130 GMT).

In Wales, pubs and restaurants can reopen indoors and customers can meet in groups of up to six from six households. Northern Ireland will review lockdown rules on May 20 and could lift some restrictions on May 24.

To bring life back to normal, countries such as Britain, China, Russia, the United States as well as the European Union have been racing against time to roll out coronavirus vaccines. Enditem

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