The Bank of England and the UK government will breathe a sigh of relief after UK inflation fell to 2.8% in April from 3.3% in March.
The reading was also slightly lower than expected, as the energy bill price cap kicked in and food and holiday prices fell.
“Annual CPI inflation eased slightly to 2.8% in April from 3.3% in March, partly a fleeting statistical quirk owing to the base effect of a lower reading this time last year combined with the temporary reprieve of lower energy prices over that timeframe,” said Rob Morgan, Chief Investment Analyst at Charles Stanley.
“The month-on-month increase of 0.7% was also a little lower than anticipated, which will be of some comfort to policymakers attempting to quell the inflationary flames without damaging the economy.”
Although the data will be welcomed by those setting policy, there are signs that the drop in inflation could be temporary, with headline rates set to rise in the near term as energy prices remain high.
But economists are also suggesting that consumer behaviour has played its part in tempering inflation, which could help keep prices in check if the trend continues.
“More importantly, looking at the figures, we see evidence of so-called “demand destruction”, i.e. a preference to reduce demand for items that have been inflated. So, while energy prices rise, consumers have cut down on some items, possibly preventing further inflation jumps,” explained George Lagarias, Chief Economist at Forvis Mazars.