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UK inflation drops but food prices rise 19%, with sugar, olive oil and milk soaring
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UK inflation drops but food prices rise 19%, with sugar, olive oil and milk soaring
Rolling, live coverage of business, economics and financial markets as analysts expect drop in consumer price index inflation
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Today's agenda
UK inflation has dropped to 8.7%, the lowest since March 2022.

However, the annual rate was still higher than the average expectation of 8.2% in a poll of economists. 

The Office for National Statistics said: "Electricity and gas prices contributed 1.42 percentage points to the fall in annual inflation in April as last April’s rise dropped out of the annual comparison, but this component still contributed 1.01 percentage points to annual inflation."

This time last year, global energy prices had soared after Russia’s invasion of Ukraine. Those price rises are now baked into the figures, so the headline inflation figure is falling.

While the overall drop in inflation will be welcomed, there is limited comfort when looking at food prices: prices for food and non-alcoholic drinks rose by 19% in the year to April.

That was only a marginal drop from the 19.1% rate in March.

The Office for National Statistics’ indicative modelled estimates suggest that the annual rate for food and drink in April 2023 was the second highest for more than 45 years, when the rate in August 1977 was estimated to be 21.9%.

The chancellor, Jeremy Hunt, said that food price inflation was still rising too quickly – an acknowledgment of its political importance.

Halving inflation is one of five key targets for the government (albeit one they are almost certain to hit as the effects of previous energy price increases pass through the data).

Hunt said: "The 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. So as well as helping families with around £3,000 of cost of living support this year and last, we must stick resolutely to the plan to get inflation down."

The headline inflation rate may be falling but there are also other signs that the UK is not done with price pressures just yet: core inflation is at its highest since 1992.

Core inflation is a measure closely watched by economists because it strips out the most volatile components of the index – such as food, energy, alcohol and tobacco – in an effort to work out the underlying picture.

For the Bank of England that adds to the pressure to keep on raising interest rates to cool inflation.

The agenda
 9am BST: Germany Ifo business climate index (May; previous 93.6 points; consensus 93)
 10.30am BST: Andrew Bailey speech at Mansion House net zero delivery summit
 11am BST: UK Confederation of British Industry industrial trends (May; previous -20 points; consensus -19)
 2pm BST: Andrew Bailey interview on “inflation and the economy”

We’ll be tracking all the main events throughout the day ...
Opinion
Analysis  
IMF’s anti-tax cut stance may give Rishi Sunak cover to resist Tory right
IMF’s anti-tax cut stance may give Rishi Sunak cover to resist Tory right
Media
London  
Alastair Campbell tells high court Piers Morgan authorised reporters to hack into bank account
Alastair Campbell tells high court Piers Morgan authorised reporters to hack into bank account
Desert Island Discs  
Show to move to BBC’s for-profit division in bid to make money

I’m writing to you from Kyiv, on the eve of a Ukrainian counter-offensive. The outcome is grimly uncertain. Thousands of Ukrainian soldiers equipped with battle tanks supplied by the west are massing, ready to advance. The Russians have dug in. Vladimir Putin still believes he can win in Ukraine. And Europe’s biggest conflict since 1945 continues to rage. Last week I awoke at 2.30am to the sound of explosions and tracer fire in the sky, as Moscow bombarded Kyiv again - for the ninth time this month.

Guardian reporters have been in Kyiv since before the war started. We were here as Russian tanks and armoured columns trundled towards the capital in February last year. We will continue to report from Ukraine for as long as it takes - a group of dedicated reporters, working in difficult conditions, often on the frontline.

We can’t do this without the support of Guardian readers. Your contributions fund our coverage, ensure that the truth does not become a casualty of war.

Luke Harding,
Guardian foreign correspondent

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