The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.0% in the 12 months to April 2026, down from 3.4% in the 12 months to March. This is a significant drop, and it's worth delving into the details to understand why.
On a monthly basis, CPIH rose by 0.8%, which is a slight increase from the 1.2% rise in April 2025. This monthly trend is interesting, as it suggests a gradual upward pressure on prices, but it's the annual figure that's more concerning.
The Consumer Prices Index (CPI) mirrored this trend, rising by 2.8% in the 12 months to April 2026, down from 3.3% in the previous year. This indicates a broader inflationary pressure across the economy.
The main drivers of this inflationary trend are complex. Housing and household services made the largest downward contribution to the monthly change in both CPIH and CPI annual rates. This is a surprising development, as it suggests that the cost of housing and essential services is decreasing, which is generally a positive sign.
However, this downward contribution is partially offset by an upward effect from motor fuel prices. The average price of petrol rose by 16.6 pence per litre between March and April 2026, and diesel prices rose by 31.3 pence per litre. This is a significant increase, and it's likely to have a substantial impact on household budgets.
The core CPIH, which excludes energy, food, alcohol, and tobacco, rose by 2.8% in the 12 months to April 2026, down from 3.3% in the previous year. This suggests that the underlying inflationary pressure is still present, even if it's not as intense as in previous months.
In my opinion, this data highlights the delicate balance between rising costs and falling prices. While the downward contribution from housing and household services is encouraging, the upward pressure from motor fuel prices is a cause for concern. It's a reminder that inflation is a multifaceted issue, and policymakers need to carefully consider the impact of different sectors on the overall economy.
What makes this particularly fascinating is the interplay between different sectors. The rise in motor fuel prices is a direct result of global energy market dynamics, while the fall in housing and household services costs could be linked to changes in the energy price cap and government policies. This complexity underscores the challenge of managing inflation and ensuring economic stability.
In my view, this data raises important questions about the sustainability of current economic trends. It's a reminder that inflation is not just a number, but a reflection of the broader economic landscape. As an expert, I believe that policymakers need to carefully analyze these trends and make informed decisions to ensure a stable and prosperous economy.
