Rate of inflation drops to 0.8% in April to lowest level for nearly four years amid tumbling fuel costs and energy prices

It dropped from 1.5% in March to 0.8%
PA

The rate of inflation has almost halved to its lowest level for more than three and a half years.

Prices increased by just 0.8 per cent in the year to April, the smallest rise since August 2016, the Office for National Statistics said today.

The cost of living – as measured by the Consumer Prices Index (CPI) - had been increasing at 1.5 per cent in the previous month.

But a collapse in the price of oil has sharply reduced energy and fuel costs, two major components of the CPI. Petrol prices fell by 10.4 pence per litre between March and April.

Clothing prices also fell as fashion retailers discounted their ranges during the lockdown to shift stock.

Month on month prices fell 0.2 per cent in April when most shops apart from supermarkets and pharmacies were closed and consumers in lockdown reduced their spending on everything apart from food.

Today’s drop in the inflation rate was the biggest since December 2008 at the height of the financial crisis.

Howard Archer, chief economic adviser to forecasters the EY ITEm Club, said: ”Inflation looks certain to fall back markedly further and we believe it could get as low as 0.3 per cent over the summer – which will provide some much needed help for consumers and the economy.”

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “While the coronavirus limited the availability of some goods and services, its effect on prices was more muted.

“Falling petrol and diesel prices, combined with changes to the domestic energy price cap were the main reasons for lower inflation in April.

“Games, toys and hobbies saw rising prices, perhaps as people occupied their time at home.

“Food prices grew no more quickly than other goods and services, though fresh vegetables did see stronger rises.”

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