By Marcus Leach

UK inflation slowed in April as the Consumer Prices Index (CPI) dropped to 3% in April, according to the Office for National Statistics (ONS).

The CPI rate, which measures the rising cost of living in the UK, fell from 3.5% in March, to 3% in April.

The Retail Prices Index (RPI) also fell in April, down to 3.5% from 3.6% in March.

“These latest figures show that headline and core inflation are heading south. With money supply and wage growth so weak, not to mention the euro crisis, this trend is likely to continue. Those who are worried about inflation are chasing shadows," Graeme Leach, Chief Economist at the Institute of Directors, said.

Jeremy Cook, chief economist at currency experts, World First, said the drop will be of no comfort to households due to the discrepancy in wage growth.

“This 3% figure comes on the back of a substantial shift lower in the price of a barrel of oil, coupled with the strengthening of the pound in the past few weeks. Unfortunately, this will provide no genuine comfort to households given that wage growth is nowhere near this number," he said.

“Of course, the slip in CPI will give those people who believe that further QE is needed to keep the UK economy going more room to manoeuvre. This is ahead of tomorrow’s publication of the minutes from the latest Bank of England meeting that we expect to show only one vote for another round of QE.

“This is the first print within the target zone since late 2009 although the defining characteristic of the UK inflation picture through the crisis has been its “stickiness”; its refusal to fall. We expect the CPI figure to remain around 3% for the rest of the year.

“Sterling has moved lower on the announcement, while gilts have remained higher.”

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