UK set to have slower inflation than Eurozone and US

Business Monday 20/May/2024 16:01 PM
UK set to have slower inflation than Eurozone and US

London: The United Kingdom (UK) is set to have slower inflation than both the Eurozone and the US for the first time in over two years as falling energy prices for consumers cut Britain's rate of headline price growth.

The Financial Times said that the annual growth in consumer prices for April is predicted to drop to 2.1 per cent, which is close to the Bank of England's target of 2 per cent. This would be sharply below Marchs 3.2 per cent figure.

The newspaper added that the decline is largely the result of a 12 per cent fall in the regulatory cap on household energy bills last month, following a decline in wholesale gas prices.

With the falling prices for consumers, April would be the second straight month in which UK inflation was lower than consumer price inflation in the US, and the first time since March 2022 that it was below both the US and Eurozone rate.

The figures will further fuel debate among policymakers at the Bank of England about when to cut rates from their 16-year high of 5.25 per cent. Lower inflation would provide a boost to UK Prime Minister Rishi Sunak after data this month showed that the UK economy is recovering from last year's recession in the first quarter, with growth of 0.6 per cent the fastest in two years.