April UK CPI undershot expectations at 2.3%, driven by softer services inflation, while PPI rose unexpectedly, complicating BoE policy outlook.
UK Consumer Price Index inflation for April came in below consensus at 2.3%, led by a decline in services inflation. The softer print contrasts with an upside surprise in Producer Price Index data, adding complexity to the Bank of England’s next move.
Unemployment edged up to around 5%, vacancies hit a five-year low, and wage growth continued to slow, signaling cooling labor market pressures. Analysts noted these conditions do not justify aggressive tightening, though policymakers may still consider a symbolic rate hike to reinforce inflation-fighting credibility.
The mixed data leaves markets weighing the likelihood of further BoE action, with inflation trends diverging from producer cost pressures.