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UK annual inflation surpasses BoE's 2% target for 1st time in 2019

Consumer prices in the U.K. rose 2.1% year over year in April, surpassing the Bank of England's target of 2.0% for the first time in 2019 and the 1.9% growth rate recorded in the prior month.

The Econoday consensus estimated annual inflation to rise to 2.2% in April.

The country's consumer prices index, including owner-occupiers' housing costs, registered an annual inflation rate of 2.0% in April, increasing from 1.8% in the prior month, data from the Office for National Statistics showed. The change was primarily attributed to increasing energy prices and air fares, which were affected by the timing of Easter.

"Stripping away the hike in household energy costs, the core inflation picture still looks fairly benign and this is likely to keep the Bank of England on hold this year," ING Research developed markets economist James Smith wrote, adding that a rate hike in November is still possible if a Brexit agreement is ratified, which seems unlikely, or the Article 50 period is extended further.

Clothing and footwear prices declined 1.8% in the year to April. Prices for housing and household services climbed 2.3% on an annual basis, with the largest contributions from electricity, gas and other fuels. Transport prices rose 4.6%, with the most notable contributions from air fares, fuels and lubricants, and new cars.

Meanwhile, annual producer prices edged up 2.1% in April, compared to the prior month's revised 2.2% growth rate and the Econoday's forecast for a 2.3% increase in April.