Services inflation adjustments and base effects drive annual UK CPI lower, offsetting a 0.9% monthly rise from energy prices.
UK consumer prices are expected to rise 0.9% month-on-month in April, driven by higher energy costs linked to Middle East tensions. However, annual inflation is projected to ease to 3.0% from 3.3%, reflecting base effects and data corrections.
A prior overstatement in transport inflation and a one-off £123 increase in water and sewage prices in April 2025 have skewed services inflation. The Office for National Statistics noted the error doubled the impact on services, though corrections were not applied retroactively.
Markets will focus on services inflation, which remains a key metric for the Bank of England’s policy outlook amid persistent price pressures.