Statement from CBI regarding latest inflation data

Alpesh Paleja, CBI Lead Economist, said:    “A big fall in inflation was always on the cards for April, given Ofgem’s 12% cut to the energy price cap. Households and businesses will welcome a more benign inflationary environment, but it’s worth noting that many will still be struggling with a high level of prices, particularly in food and energy bills.

“Today’s data further sets the stage for interest rate cuts in the coming months. While the Monetary Policy Committee is likely to reduce interest rates over the summer, they are still holding out for more definitive falls in measures of domestic price pressures. It’s encouraging that pay growth is now a touch below the Bank of England’s forecast, but there’s still a long way for it to get closer to levels consistent with inflation at target.

“The Bank will also be mindful of growing upside risks to inflation in the near-term: with the growth outlook improving at home, and tensions in the Middle East threatening to stoke commodity prices and supply pressures globally.”

For further information visit the CBI Website