Petrol prices fuel inflation rise

Recent oil market pressures and rises on the prices of furnishings have lead to a 0.1% rise in the past month to 1.2%, according to the Office of National Statistics (ONS).

The Consumer Prices Index (CPI) - the government's target measure of inflation - rose from 1.1% in March after the price of petrol and domestic heating oil upped this April.

As an internationally comparable measure of inflation, the CPI shows that UK inflation rate has been among the lowest in the EU since the start of 2000. The ONS data concluded that the EU 15 average inflation rate for March 2004, the latest available figures, was 1.5% compared with a UK figure of 1.1%.

The government's target for the inflation rate is 2% - based on the CPI measure.

Furniture, furnishings and carpets also had significant upward effect on inflation where, following relatively weak seasonal recoveries in March, fewer special offers in April meant that prices fell by less than in April last year, the ONS said.

In addition, package holidays and subscriptions to digital TV helped increase recreational costs while last year's reduction in the cost of renting audio-visual goods dropped out of the 12-month comparison.

As usual, prices were boosted in April by the Budget which increased alcohol and tobacco duties, and by other changes that occur once a year; for example, water charges and the cost of a TV licence. However, these changes were similar to last year and so did not have a large impact on the rate of inflation, the ONS said.

The largest downward effect on inflation came from transport services. In particular, the recorded rise in air fares in April 2004 was much less than a year ago, mainly as a result of the timing of Easter. A large downward effect also came from food, mainly due to vegetables where prices fell this year but rose sharply for some items a year ago.

Similar factors also impacted on the Retail Prices Index (RPI) in April. RPI inflation fell to 2.5% in April, down from 2.6% in March. This was largely due to a significantly smaller increase in this year's Council Tax bills than last year's increase.

Both the CPI and the RPI are compiled each month using the same underlying price data, based on a large and representative selection of more than 650 separate goods and services for which price movements are measured in around 150 areas throughout the UK.

(gmcg)