UK inflation, as measured by the Consumer Price Index (CPI), soared to a 40-year high to nine per cent in April, as food and energy prices spiralled upwards, data released by the Office for National Statistics revealed on Wednesday.

The April figure was two percentage points higher than the seven per cent level seen in March, but factionally undershot expectations of 9.1 per cent. This was the first time in seven months that inflation missed forecasts to the downside.

The same report showed that annual core inflation, that excludes food and energy prices, rose by 6.2 per cent in April from 5.7 per cent in March, in line with consensus. In an attempt to tame inflation, the Bank of England raised its policy interest rate by a quarter-point to a 13-year high in May.

In the meantime, US retail sales grew at a solid pace in April, reflecting broad-based gains and suggesting that US consumers continue to open their wallets despite the increasing pinch from higher prices. US retail sales − a measure of spending at stores, online and in restaurants − rose by a seasonally-adjusted 0.9 per cent last month compared with March, the Commerce Department said on Tuesday.

That was the fourth month in a row of higher retail spending. Economists are watching closely to see if consumer spending can continue to outpace inflation. Slower spending would drag down the economy’s growth.

Finally, China’s industrial production, a gauge of activity in the manufacturing, mining and utilities sectors, dropped by 2.9 per cent in April from the same month last year, data by the National Bureau of Statistics showed on Monday. The figures missed expectations for a slight increase of 0.4 per cent.

The April decline in production, which partially reversed a five per cent expansion in March, is the biggest fall since March 2020, as strict COVID lockdowns depressed economic activity in the world’s second largest economy. At the same time, retail sales plunged by 11.1 per cent annually, much worse than the 3.5 per cent decrease in March and the 6.1 per cent fall expected by economists.

This article has been prepared by Bank of Valletta plc for general information purposes only.