Inflation may have dropped to its lowest level for more than a year, but there was little to be cheery about in the latest official figures as food prices continued to race higher.
The data from the Office for National Statistics (ONS) showed Consumer Prices Index (CPI) inflation fell to 8.7 per cent in April, down from 10.1 per cent in March, as energy prices stabilised after sky-high rises a year ago.
However, food price inflation is still close to levels not seen for more than 45 years, at 19.3 per cent, keeping household finances very much under pressure.
Here we look at the key questions surrounding the latest data:
If inflation has dropped so sharply, why are experts so concerned by the latest figures?
The fall in inflation was expected to be far greater, with experts pencilling in a drop to 8.2 per cent in April.
It was also higher than the 8.4 per cent predicted by the Bank of England just two weeks ago.
CPI has come in higher than predicted for three months in a row now, as inflation has proven painfully stubborn.
And while welcome, the fall in inflation was expected, given that energy prices have stabilised since the energy price guarantee came into effect last October.
What is behind April’s higher-than-expected inflation?
Rocketing food prices appear to be the key reason why inflation failed to fall as fast as had been hoped.
Consumers continue to face eye-watering price increases on kitchen-cupboard essentials such as olive oil, up 49 per cent on a year ago, cheese, now 42 per cent more expensive, and milk and baked beans, both up 39 per cent, according to the ONS data.
On Tuesday, Chancellor Jeremy Hunt said the government “stands ready” to update pricing rules after he spoke to representatives from the food industry to raise concerns over the rocketing cost of groceries.
There have been some small signs that food prices may soon be on the descent, but retailers appear to be passing on little in the way of meaningful cuts, despite reporting that commodity prices are beginning to ease.
What do the higher-than-expected inflation figures mean for me?
Economists are saying that April’s higher-than-forecast CPI may mean yet more interest-rate rises on the cards, which will pile further pain on financially stretched households.
The Bank of England has already increased rates 12 times in a row, to 4.5 per cent this month, as it battles to curb inflation.
It had been hoped that the May increase would be the last for a while, but experts said this month’s 8.7 per cent reading increases the chances of further increases.
James Smith, an economist at ING, said data “undoubtedly puts pressure on the Bank of England to hike by another 25 basis points in June”.
But, he added, “it’s not a foregone conclusion, not least because we still have another set of data before the meeting”, and pointed to the fact that jobs and wages data have been “moving in the right direction”.
When can we hope to see respite from the cost crisis?
Bank of England governor Andrew Bailey insisted in a House of Commons committee hearing with MPs on Tuesday that inflation has “turned the corner”.
But the Bank also admitted it had made some errors in its inflation forecasting, which had meant it underestimated the food-price shock.
It predicted earlier this month that inflation would fall to 5.1 per cent in the fourth quarter of 2023, which would narrowly allow the government to hit its target to halve inflation by the end of the year.
The latest inflation surprise has cast doubt over the government achieving that goal, although Mr Hunt said the target was “still absolutely deliverable”.
How can the government be so sure it will hit its inflation target?
Energy prices are expected to fall sharply from July, with Ofgem expected to confirm on Thursday the new price cap level when the current energy price guarantee limiting bills to £2,500 a year comes to an end.
Consultancy company Cornwall Insight predicts that households can expect their annual bill to fall by between £446 ($550) and £2,054 a year, based on falling wholesale energy prices.
But if food prices fail to begin to fall soon and with prices still rising across the board on everything from rent to council tax, water and broadband bills, that inflation target could yet prove elusive.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
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MATCH INFO
Uefa Champions League quarter-final, second leg (first-leg score):
Manchester City (0) v Tottenham Hotspur (1), Wednesday, 11pm UAE
Match is on BeIN Sports
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
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What is a black hole?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
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Bert van Marwijk factfile
Born: May 19 1952
Place of birth: Deventer, Netherlands
Playing position: Midfielder
Teams managed:
1998-2000 Fortuna Sittard
2000-2004 Feyenoord
2004-2006 Borussia Dortmund
2007-2008 Feyenoord
2008-2012 Netherlands
2013-2014 Hamburg
2015-2017 Saudi Arabia
2018 Australia
Major honours (manager):
2001/02 Uefa Cup, Feyenoord
2007/08 KNVB Cup, Feyenoord
World Cup runner-up, Netherlands
UAE currency: the story behind the money in your pockets
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Transmission: Eight-speed automatic
Fuel consumption, combined: 9.4L / 100kms
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Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
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GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
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Rating: 4/5
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
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U19 WORLD CUP, WEST INDIES
UAE group fixtures (all in St Kitts)
- Saturday 15 January: UAE beat Canada by 49 runs
- Thursday 20 January: v England
- Saturday 22 January: v Bangladesh
UAE squad:
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Jaishankar, Nilansh Keswani, Aayan Khan, Punya Mehra, Ali Naseer, Ronak Panoly,
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The biog
Name: Mohammed Imtiaz
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Arrived in the UAE: 1976
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US PGA Championship in numbers
1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.
2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.
3 Number of seasons without a major for McIlroy, who finished in a tie for 22nd.
4 Louis Oosthuizen has now finished second in all four of the game's major championships.
5 In the fifth hole of the final round, McIlroy holed his longest putt of the week - from 16ft 8in - for birdie.
6 For the sixth successive year, play was disrupted by bad weather with a delay of one hour and 43 minutes on Friday.
7 Seven under par (64) was the best round of the week, shot by Matsuyama and Francesco Molinari on Day 2.
8 Number of shots taken by Jason Day on the 18th hole in round three after a risky recovery shot backfired.
9 Jon Rahm's age in months the last time Phil Mickelson missed the cut in the US PGA, in 1995.
10 Jimmy Walker's opening round as defending champion was a 10-over-par 81.
11 The par-four 11th coincidentally ranked as the 11th hardest hole overall with a scoring average of 4.192.
12 Paul Casey was a combined 12 under par for his first round in this year's majors.
13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.
14 The world ranking of Justin Thomas before his victory.
15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.
16 The par-four 16th marks the start of Quail Hollow's so-called "Green Mile" of finishing holes, some of the toughest in golf.
17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.
18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).
