Fruit and vegetables on a market stall in a neighborhood in east London, March 31, 2023 (AFP/Susannah Ireland)
British inflation fell in March but is expected to fall further in April, according to Bank of England Governor Andrew Bailey, good news for the Conservative government in the campaign and for consumers in the grip of a power crisis. purchase.
Inflation fell slightly in the United Kingdom in March, to 3.2% over one year compared to 3.4% the previous month, the lowest since September 2021, specifies the Office for National Statistics (ONS) in its press release. Wednesday.
However, analysts expected a slightly more pronounced slowdown to 3.1%.
Food prices have particularly stalled, while fuel has slowed the decline in prices, with oil prices having rebounded strongly since the fall in the wake of geopolitical tensions.
On Wednesday, on the sidelines of the IMF’s spring meetings, Bank of England (BoE) Governor Andrew Bailey estimated that for April, “the figures should show a sharp fall” in inflation “towards the target ” of the monetary authority, namely 2%.
During its last monetary decision in March, the institution reiterated its forecasts according to which inflation should fall to its target of 2% in the second quarter.
He also reiterated comments already widely made the day before in Washington according to which the United Kingdom is in the process of “disinflation” but is waiting for confirmation of this process to start a cycle of cutting interest rates.
Faced with these comments, the pound erased all its gains of the session and found itself in balance against the dollar at 1.2433 dollars around 4:40 p.m. GMT. It also fell against the euro, which gained 0.26% to 0.86 pounds.
Chancellor of the Exchequer Jeremy Hunt said the March figures were “good news” which would help Britain’s finances.
“After two difficult years, our economic plan is working,” rejoiced British Prime Minister Rishi Sunak.
British inflation had soared to 11% in the fall of 2022, in the wake of the post-covid restart of the economy and the war in Ukraine, and remains one of the main downsides for the conservatives ahead of legislative elections expected this year.
Some economists believed that the decline in inflation, a little less pronounced than expected by analysts and slower than expected, is steady enough to potentially prompt the Bank of England to cut interest rates earlier than expected.
“Today’s figures should reassure the Bank of England that consumer prices remain on track” to meet its 2% target, especially as “wage growth has also lost steam in recent months.” “, comments Christopher Breen, economist at the CEBR economic think tank.
He notes that prices should slow down in April in particular because of a planned drop in electricity prices.
“We still anticipate a first rate cut in June,” concludes the economist. The BoE’s key rate currently stands at 5.25%.
Rob Wood, of Pantheon Economics, judges on the contrary that the outlook for June is moving away a little and that the BoE’s monetary policy committee could “choose to wait until August”.
© 2024 AFP
Did you like this article ? Share it with your friends using the buttons below.
