UK Retail Inflation Report summary
May 2022
Period covered: Period covered: April 2022
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. Subscribe to access this data or take out a free 30 day subscription trial now.
The headline inflation rate rose by 00 percentage points to 00% YoY in April (00% last month) - a 40-year high. On a MoM basis, inflation rose by 00%.
April’s rise was slightly behind economists forecasts of 00%, with inflation surging off the back of the rise in the energy price cap, VAT increase within the hospitality sector, and further uplift in fuel prices.
Housing and Household services made the largest upward contribution to the change in the CPI rate, driven by sharp rises in electricity (00%) and gas (+66.8%) prices reflecting the 00% increase in the Ofgem price cap on 1 April 2022.
Inflation within the Restaurants & Hotels category rose by 00% YoY, from 00% last month as VAT returned to its pre-pandemic level of 20%, having been lowered in the last 18 months to support businesses.
Elsewhere, Transport inflation was driven higher by another rise in motor fuel prices in April. Petrol prices rose to a new record high, increasing to 00 pence per litre (ppl) from 00 ppl a year ago. Similarly, diesel prices rose to 00 ppl – also a record high.
Concerningly, Food inflation is now at its highest level since June 2011, rising by 00% YoY. Small upward contributions came from seven of the 11 sub-components, notably Meat & Milk, Cheese & Eggs. Earlier this week, Bank of England chief Andrew Bailey called the current pressures on food prices ‘apocalyptic’, blaming the war in Ukraine for sharp rises in wheat and cooking oil which are set to worsen as the war continues.
Notably, factory gate inflation (output prices) hit its highest level since July 2008 (+00% YoY from 00% last month) in April. Upward pressure came from Food products indicating further rises in consumer prices are likely.
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Commodity prices remain elevated
Source: Datastream
