Inflation falls to 8.7% – but pressures remain

Since the start of the year, politicians and central bankers have been promising a collapse in the inflation rate. But monthly data kept rolling in, and the rate remained in double digits. This put even more pressure on the data this morning, published by the Office for National Statistics, with the Bank of England (BoE) making clear in its last report that April’s figures would turn the corner on price hikes. Unlike its previous predictions in this inflation saga, it seems the BoE has managed to get this one right.

Prices rose 8.7 per cent on the year to April – still a staggeringly high figure, but down from 10.1 per cent in March. The main driver of the rate fall was gas and energy prices, as last year’s hefty uplift to the energy price cap fell out of the annual estimates. The collapse in energy bills is stark: with monthly gas prices ‘falling by 1.0