LONDON, May 23 (Xinhua) -- Consumer price inflation (CPI) fell to a 13-month low of 2.4 percent, continuing a fall from a high of 3.1 percent in the past seven months and weakening the case for a bank rate rise.
Figures from the Office of National Statistics (ONS) on Wednesday showed the April CPI rate fell by one basis point from 2.5 percent in March, a falling trend that has marked the last six months since the rate hit a high of 3.1 percent in November.
Downward pressure in the rate came from a year-on-year drop in air fares reflecting the earlier Easter vacation period in 2018 compared to 2017.
Lower costs of clothing and footwear as well as food and drink also aided the fall in the rate.
Howard Archer, chief economic adviser to the EY ITEM Club, said there is likely to be only one interest rate rise this year in 2018, probably of 25 basis points to take the rate to 0.75 percent.
This would be only the second rate rise since March 2009, and would represent a gradual approach to returning interest rates to a higher level.
There is likely to be little pressure on the Bank of England's (BoE) rate-setting Monetary Policy Committee (MPC) to raise the rate over the coming months.
"Domestic price pressures will firm only slowly over the coming months amid no more than middle of the road British growth," Archer told Xinhua.
Earnings growth is evident, against a background of near-record levels of employment and an unemployment rate at its lowest since the mid-1970s, but is not strong enough to strengthen the hand of those on the MPC who want to raise rates.
"Regular earnings growth is picking up only gradually despite the tight labor market, and we expect this to remain the case," said Archer who added that firms remain keen to limit their total costs in a challenging and uncertain environment largely characterized by the unknown outcome of the Brexit process.
Suren Thiru, Head of Economics at the business lobby group the British Chambers of Commerce (BCC), cautioned against a rate rise in the coming months.
Thiru said: "While we think that interest rates will rise again before the end of the year, we would caution against the sort of sustained tightening in monetary policy recently implied by some MPC members, as it could dampen business and consumer confidence and further subdue British economic growth."
