UK consumer price inflation slowed more than anticipated in April, dropping to 2.8% from 3.3% in March and coming in below the 3% consensus forecast.
The preliminary figures from the Office for National Statistics mark a notable deceleration in price pressures, offering a reprieve for households grappling with the cost of living and reducing the immediate urgency for monetary tightening.
The softer inflation print shifts the balance of probabilities toward the Bank of England holding its benchmark interest rate at 3.75% when policymakers convene later this week.
Markets are currently pricing in a high likelihood of a pause, effectively ending the aggressive hiking cycle that began in early 2021.
The decision will be closely watched by mortgage lenders and savers, as the BoE’s rate directly influences borrowing costs and deposit yields across the economy.
While the April data provides a clear signal that headline inflation is cooling, the central bank faces a complex landscape.