The drop was unexpected, and the ONS said that the early Easter holidays, which brought air fares down in April, had contributed to the figure.
This fall in inflation will ease pressure on the Bank of England to raise interest rates at the next MPC meeting.
Ben Brettell, Senior Economist, Hargreaves Lansdown, said:
Falling inflation comes as good news for cash-strapped households, after a prolonged spell of above-target inflation combined with anaemic wage growth.
UK inflation fell unexpectedly to 2.4% in the year to April, with lower air fares the biggest contributing factor. Meanwhile last week’s labour market figures showed pay excluding bonuses rising 2.9%. Sterling dropped on the news, losing around a third of a cent against both dollar and euro.
Inflation falling for the third month in a row further dents any hopes of a late-summer rate rise from the Bank of England. The Bank’s currently thought likely to put rates up in August. But it looks to me like 2018 will be another year of the Goldilocks economy - not too hot to stoke inflation and force interest rates higher, and not too cold to induce any panic among policymakers.
I think we might not see a rate rise for the rest of the year. When they do rise, they’ll do so only gradually, and peak at much lower levels than in previous cycles. But while savers will be disappointed, it’s pretty good news for investors. Stock markets don’t tend to like rising interest rates much, so an environment where rates rise only gradually should be supportive for the UK stock market.
