LONDON: British inflation hit a near four-year low in April as oil prices crashed, official data showed Wednesday, with the rate set to slide further as the coronavirus slashes prices generally.
The Consumer Prices Index (CPI) annual rate slumped to 0.8% last month from 1.5% in March, the Office for National Statistics said in a statement. Analysts’ consensus forecast had been for a slide to 0.9%. “The fall in the headline rate of CPI inflation in April to its lowest level since August 2016 primarily was due to a 0.6 percentage-point reduction in the contribution from energy prices,” noted Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
He added that inflation was set to hit zero by the summer as “retailers are planning further large price cuts”. While Britain’s government has eased its lockdown, the bulk of shops remain shut as the country’s official death toll from COVID-19 reached at least 41,000, second only to the United States. World oil prices have meanwhile plummeted during the crisis on eroding demand for crude, pulling down prices of petrol and jet fuel.
“It’s widely accepted that the pandemic is a profoundly deflationary shock to the global economy,” Neil Wilson, chief market analyst at trading group Markets.com, said following Wednesday’s data. “No surprise then that UK consumer price inflation” tanked in April.