The annual rate of inflation in the UK fell to 8.7 per cent in April, compared with 10.1 per cent the month before, according to the Office for National Statistics.
Economists had expected the April figure for the Consumer Price Index (CPI) to come in lower, while the Bank of England predicted an inflation number of 8.4 per cent.
Nonetheless, this is the first time in eight months that UK inflation has been in single digits, after hitting a 41-year high in October last year.
"The rate of inflation fell notably as the large energy price rises seen last year were not repeated this April, but was offset partially by increases in the cost of second-hand cars and cigarettes," ONS chief economist Grant Fitzner said.
"However, prices in general remain substantially higher than they were this time last year, with annual food price inflation near historic highs."
Stuart Cole, chief macro economist at Equiti Capital, said the battle to contain rising prices in the UK was "far from over".
He told The National that the Bank of England may need to consider raising interest rates further as it awaits evidence that the inflation crisis is easing.
"On the back of today’s numbers, that evidence looks very hard to find as of yet," he said.
Food prices are still increasing, but the rate of food inflation dropped slightly – in the year to April, prices rose 19.1 per cent, down from 19.2 per cent in March.
Energy costs contributed 1.4 per cent of the fall in overall inflation, as last April's spike in electricity and gas prices dropped out of the annual comparison. Nonetheless, energy costs still contributed 1.01 percentage points to annual inflation, the ONS said.
“I promised when I took office that I would halve inflation, and today we’ve received the encouraging news that it has fallen. But it is still too high," Prime Minister Rishi Sunak said.
"So we’ll continue to target the pressures that push inflation up and continue taxing the extraordinary war-time windfall profits of oil and gas companies."
'Stick resolutely to the plan'
Chancellor Jeremy Hunt appeared to rule out tax cuts in the near future as he stressed the need to tackle inflation.
"A tax cut is putting money in people's pockets so they can spend more.
"The biggest way that I can put money in people's pockets so they have more to spend is to halve inflation because that is eroding 10 per cent of the value of people's pay packets or has been over the last year,” Mr Hunt said.
"If we want to cut taxes in the long run, as all Conservatives want to do, because I believe in a low-tax economy, number one task is to get inflation down."
Mr Hunt added: "the International Monetary Fund (IMF) said yesterday we've acted decisively to tackle inflation, but although it is positive that it is now in single digits, food prices are still rising too fast. We must stick resolutely to the plan to get inflation down."
Rachel Reeves from the opposition Labour Party said: "As bills keep surging, families will be worried food prices and the cost of other essentials are still increasing.
"They will be asking why this Tory government still refuses to properly tackle this cost-of-living crisis, and why they won't bring in a proper windfall tax on the enormous profits of oil and gas giants.
"The reality is that never have people paid so much in taxes and got so little in return.
"Our economy is constantly lurching from crisis to crisis, when we should be protecting family finances and building our national economic security here in Britain."
'Mini sigh of relief'
While the expected drop in inflation into single digits was widely welcomed, it is unlikely to feel much better for businesses and household budgets.
"It’ll take a while for people to feel this in their pockets, particularly with food-price inflation and generalised inflationary pressures still strong," said Alpesh Paleja, the lead economist at the Confederation of British Industry.
Alice Haine, personal finance analyst at Bestinvest, said while households could "breathe a mini sigh of relief", consumers should not expect a major change to their disposable incomes.
"The lower inflation figure is more about comparing apples with apples than retreating prices," she said.
"This is because April’s Consumer Prices Index is compared to the same month in 2022 when the energy price cap increased by a whopping 54 per cent.
"With the astronomical jump in household energy bills now falling out of the annual comparison, it explains why the headline inflation figure has fallen sharply.
"In reality, energy prices are actually higher this quarter, with the typical bill capped at £2,500 [$3,106] by the temporary Energy Price Guarantee, compared to £1,971 set by Ofgem’s energy price cap in the second quarter of 2022.
"Another area applying major pressure on household budgets is the cost of grocery shopping, with food and non-alcoholic beverage inflation easing slightly on the year to 19.1 per cent – making it hard for households to pay for the supermarket shop," she added.
Susannah Streeter from Hargreaves Lansdown said that inflation has "soared up like an eagle and taken a ferocious bite out of our standard of living, but it’s coming down at a snail’s pace and leaving a sticky trail of prices in its wake".
Core of the problem
Some economists said the fall in the headline figure should not obscure some of the more worrying aspects of the inflation figures.
Core CPI inflation, which strips out energy and food costs, rose by 6.8 per cent in the 12 months to April 2023, up from 6.2 per cent in March, which is the highest rate since March 1992, according to the ONS.
“The fall in the headline rate will reassure business leaders who are hoping that we may now be through the worst of the inflationary peak. However, today’s data will still be a worry to policymakers," said Kitty Ussher, chief economist at the Institute of Directors.
“Policymakers will hope that now that the headline rate is back to single digits, expectations of future inflation will now start to fall as well, which then could become self-fulfilling.”
London's FTSE 100 Index slumped by 1.6 per cent as the inflation surprise led to bets of more rate rises to come.
Rates are at 4.5 per cent after 12 successive hikes to try to curb the cost crisis. Financial markets are pricing in rates to peak near 5.5 per cent.
The specs: 2019 Haval H6
Price, base: Dh69,900
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Seven-speed automatic
Power: 197hp @ 5,500rpm
Torque: 315Nm @ 2,000rpm
Fuel economy, combined: 7.0L / 100km
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Dark Souls: Remastered
Developer: From Software (remaster by QLOC)
Publisher: Namco Bandai
Price: Dh199
Drishyam 2
Directed by: Jeethu Joseph
Starring: Mohanlal, Meena, Ansiba, Murali Gopy
Rating: 4 stars
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
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ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Company%20profile
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Company%20Profile
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TEACHERS' PAY - WHAT YOU NEED TO KNOW
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
UAE currency: the story behind the money in your pockets
Porsche Macan T: The Specs
Engine: 2.0-litre 4-cyl turbo
Power: 265hp from 5,000-6,500rpm
Torque: 400Nm from 1,800-4,500rpm
Transmission: 7-speed dual-clutch auto
Speed: 0-100kph in 6.2sec
Top speed: 232kph
Fuel consumption: 10.7L/100km
On sale: May or June
Price: From Dh259,900
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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Global state-owned investor ranking by size
1.
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2.
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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6.
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Canada
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7.
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Singapore
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Australia
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Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
SPEC%20SHEET%3A%20APPLE%20IPAD%20(2022)
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Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now