• Prior +10.1%
  • CPI +1.2% vs +0.8% m/m expected
  • Prior +0.8%
  • Core CPI +6.8% vs +6.2% y/y expected
  • Prior +6.2%
  • Core CPI +1.3% vs +0.7% m/m expected
  • Prior +0.9%

Boom! The headline reading may reflect a drop in annual inflation from March to April, but take a look at the core annual inflation reading instead. That's a major jump as monthly inflation figures also beat estimates handily, and that suggests that price pressures are still persisting rather strongly in the UK economy.

This makes BOE governor Bailey's remarks yesterday here rather laughable. Inflation has certainly not turned the corner.

Food price inflation remains hot and has only come off ever so slightly, while the drop in headline annual inflation reflects base effects adjustment after the surge in energy prices from last year. As noted by ONS, the upward contribution from the higher Ofgem energy cap has now dropped out of the annual estimates.

As for core annual inflation, that is the highest since March 1992.