UK CPI Inflation Jumps to 3.5% YoY in April, Surpassing Expectations

UK CPI Inflation Jumps to 3.5% YoY in April, Surpassing Expectations

The United Kingdom's year-over-year Consumer Price Index (CPI) inflation increased to 3.5% in April, surpassing the expected 3.3%. This marks a significant jump from the 2.6% increase seen in March, indicating persistent inflationary pressures. The latest data, released by the Office for National Statistics (ONS), shows inflation is moving further away from the Bank of England’s target of 2%.

Key Figures:

• YoY CPI inflation: 3.5% (April) vs. 3.3% expected
• MoM CPI inflation: 1.2% (April) vs. 1.1% expected
• Core CPI (excluding food and energy): 3.8% YoY (April), up from 3.4% in March
• Services inflation: 5.4% YoY (April), up from 4.7% in March

In addition to the yearly CPI, the month-on-month inflation also accelerated, rising by 1.2% in April, well above the 0.3% recorded in March. This sharp increase in inflation has heightened market concerns over the ongoing cost-of-living crisis in the UK.

Market Reaction:

The inflation data triggered a sharp rebound in the British Pound (GBP), pushing the GBP/USD exchange rate to 1.3450. The surprise jump in inflation further supports the view that the Bank of England may need to take more action to tackle rising prices.

As inflation continues to outpace expectations, analysts will be closely watching how the Bank of England responds in its upcoming monetary policy meetings.