via wolfstreet:
Food Inflation Raged at 19%. But energy prices plunged. In response, UK government bond yields spiked, pricing in higher BOE policy rates.
No one ever seems to expect these nasty surprises that this inflation continues to dish out. The nasty surprise du jour was dished out in the UK, where the “core CPI” (which excludes energy, food, alcohol, and tobacco) and the services CPI had scary month-to-month spikes that pushed them to multidecade highs. And very unhelpfully, food inflation continued to rage at an annual rate of over 19%.
Core CPI (excludes energy, food, alcohol, and tobacco) spiked by 1.3% in April from March, on red-hot increases in the indices for new and used vehicles and for all kinds of services (more on those in a moment). To put this into perspective: a 1.3% month-to-month spike translates into 16.8% annualized!
This pushed the year-over-year increase up to 6.8%, the worst year-over-year increase since 1992, according to data from the UK Office of National Statistics (ONS) today. This reverses several false-hope declines starting in November.
Services CPI spiked by 1.6% in April from March, which translates into 21% annualized! It was powered by massive spikes in the indices for auto repairs, transportation, hospital services, communication, recreation & culture, rents, and insurance of all kinds, and was somewhat softened by drops in energy services.