Shilen Shah, Bond Strategist at Investec Wealth & Investment, said: “April’s CPI print was somewhat higher than the consensus at 2.7%. The inflation figure was boosted by higher air fares due to the Easter holidays falling later in the calendar year. Higher electricity and clothing prices were somewhat offset by lower motor fuel prices, however the underlying inflation figure does indicate some inflationary pressures in the economy with the core CPI print increasing to 2.4%.
“Despite the higher than expected core and headline CPI prints, the BoE is likely to be unmoved given that the latest business surveys suggest employers are unlikely to compensate workers with inflation-bursting wage rises over the coming months given the uncertainty over the economic outlook and the Brexit negotiations.”
