UK Retail Inflation Report summary
May 2021
Period covered: Period covered: April 2021
Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day trial now.
CPI inflation accelerated in April, rising by 00% year-on-year, up from the 0.7% rise in March. This was in line with forecasts from economists and the Bank of England and was at the highest level since March 2020.
As lockdown restrictions eased during the month, the number of unavailable items fell to 28 (3.1% of the basket weight).
Transport (0.15 pp) also made a notable upward contribution driven by motor fuels as petrol and diesel prices rose between March and April this year compared with sharp declines a year ago.
Just two categories provided a downward contribution in April. Recreation & Culture (-0.24 pp) saw prices fall this year compared with a rise in 2020, driven by a range of items including computer games, game consoles, dolls, craft kits and pre-school activities. 00 made a 0.02 pp downward contribution, as many businesses were able to reopen due to easing lockdown restrictions.
Updated Bank of England forecasts suggest that inflation will peak in Q4 2021 at around 00% before falling back over the remainder of the forecast period.
Housing, Water, Electricity, Gas & Other Fuels accelerated into inflationary territory in April, rising by 1.7% year-on-year, from -0.9% in the previous month. Upward pressure was exerted by an acceleration in electricity and gas prices due to the rise in the energy price cap at the beginning of the month.
The average price of a barrel of oil currently stands at $70 (as of 19 May), a 108% rise on a year ago, and up 7% on the previous month. The recent rise has been driven by increased optimism around the outlook for demand this year while stockpiles are also diminishing.
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CPI vs Core Inflation
Source: ONS
