Why the latest official UK inflation figures are not what they seem
Official data suggests the UK's rate of inflation eased from 3.5% in April to 3.4% in May – but in reality the figure was unchanged, standing at 3.4% in both months.
The discrepancy is to do with an error made in the initial calculation of April's inflation rate.
When April's Consumer Prices Index figure was first reported by the Office for National Statistics (ONS), on May 21, it was stated as being 3.5%.
However on June 5, the ONS issued a statement saying this figure was incorrect and that it should have been 3.4%.
The ONS said it had spotted a mistake in the way April's rate had been calculated.
The error was to do with data from the Department for Transport concerning vehicle excise duty (VED).
This data had overstated the number of vehicles subject to VED – which in turn led to the ONS overstating April's overall rate of inflation by 0.1 percentage points, reporting it to be 3.5% instead of 3.4%.
But while April's rate is now known to have been wrong, the ONS has a policy of not revising official inflation figures in subsequent publications.
This is why, in the inflation data published on Wednesday, the ONS said April's inflation rate was 3.5%, not 3.4% – and why its figures suggest inflation eased month on month, instead of what actually happened, which is that it remained at 3.4%.
April's inflation figure will continue to be stated by the ONS as 3.5%, despite it actually being 3.4%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
17 minutes ago
- Forbes
What's Driving Google Stock Higher?
PARIS, FRANCE - JUNE 12: The Google Cloud logo is displayed during the 9th edition of the VivaTech ... More show at Parc des Expositions Porte de Versailles on June 12, 2025 in Paris, France. (Photo) With a 7% year-to-date (YTD) decline, Google's stock (NASDAQ:GOOG) has underperformed the S&P 500, which is up 2%. This underperformance is partly due to increased regulatory scrutiny and increased investor concerns regarding the potential for AI to disrupt Google's search business. Nevertheless, GOOG stock has doubled since early 2023, driven by three key factors: We'll explore these factors in greater detail. While GOOG stock has seen impressive gains, if you desire growth with a less volatile experience than that of a single stock, consider the High Quality portfolio, which has surpassed the S&P, achieving >91% returns since inception. Additionally, check out – QUBT Stock Is Up 80% In A Month. What's Happening With Quantum Computing? Google's revenue growth in recent years has been significantly boosted by its cloud business, which has shown strong momentum with a 64% increase in sales between 2022 and 2024. The company's core search business is also performing well, driven by higher advertising revenues, a trend expected to continue. Notably, Google's search ad revenues are up 22%, while YouTube ad revenue has increased by 24% over the same period. Artificial intelligence has emerged as a crucial growth driver across Google's services; for instance, AI-powered features like AI Overviews and Circle to Search have enhanced user engagement in Search, and Google's AI-powered Cloud portfolio has seen increased customer demand. This period highlights Google's success in diversifying its revenue streams while maintaining its dominance in advertising, with cloud services and AI integration being the primary drivers of accelerated growth. An example of this diversification and growth is Waymo, Google's autonomous driving subsidiary, which is now providing over 250,000 paid rides per week across Phoenix, San Francisco, Los Angeles, and Austin. See – While Tesla Talks, Waymo Drives. Since 2022, Google's operating margin has expanded by 600 basis points, rising from 26.5% to 32.7%. This improvement is a direct result of several key factors: the maturation and increasing profitability of Google Cloud, the continued strength and AI-enhanced monetization of its core advertising business, and a concerted effort to manage costs and improve operational efficiency across the entire company. This improved profitability, combined with strong sales growth and the rising demand for cloud infrastructure amid the AI boom, has positively shifted investor perception. Consequently, the company's price-to-sales (P/S) valuation multiple has grown by 47%, climbing from 4.1x trailing revenues in 2022 to the current 6.1x. At its current trading price of around $180, GOOG stock's price-to-sales (P/S) ratio of 6.1x is closely aligned with its five-year average of 6.2x. See Google's Valuation Ratios for more details. However, there are compelling reasons to believe this valuation multiple could climb higher. Google's strategic AI investments are set to significantly expand its business. Google Cloud will benefit from increased enterprise demand for AI, boosting infrastructure and platform sales. Concurrently, AI will enhance Search and advertising through improved relevance and targeting, leading to greater user engagement, higher ad click-through rates, and better advertiser ROI. Additionally, AI-powered features in YouTube and other services are expected to drive user retention and premium subscription growth. Despite its promising outlook, Google stock isn't without its risks. During the inflation-driven market downturn in 2022, GOOG stock experienced a significant drop of 44.6%, falling from a high of $150.71 on November 18, 2021, to $83.49 on November 3, 2022. This contrasted with a milder peak-to-trough decline of 25.4% for the S&P 500 during the same period. While the stock fully recovered to its pre-crisis peak by January 25, 2024, a similar pattern emerged earlier this year amid trade war anxieties, where the stock dropped around 30% compared to a 19% peak-to-trough decline for the S&P 500. Our dashboard on Buy or Sell Google Stock has more details. Beyond broader market and geopolitical challenges, Google faces company-specific risks related to its substantial capital expenditures. Since 2022, Google has invested an astonishing $134 billion in CapEx. A critical question looms: what if these considerable investments fail to deliver the anticipated returns? Additionally, there's the regulatory risk, with the Department of Justice actively pushing for Google to be split to address alleged monopolistic practices in the search market. See – Google's $1 Trillion Lawsuit. Indeed, regulatory risk is just a minor facet of the risk assessment framework we utilize while creating the Trefis High Quality (HQ) Portfolio. This portfolio encompasses 30 stocks and has consistently outperformed the S&P 500 over the past four years. What accounts for this? As a whole, HQ Portfolio stocks have generated superior returns with less risk compared to the benchmark index; offering a smoother ride, as illustrated in HQ Portfolio performance metrics.
Bloomberg
43 minutes ago
- Bloomberg
Stocks Waver Ahead of Fed Decision; Trump Calls on Iran to Surrender
Stocks waver ahead of the latest rate decision from the Federal Reserve. President Trump calls for Iran to unconditionally surrender in their conflict with Israel, while France's Emmanuel Macron speaks out against pursuing regime change in the Islamic Republic. OpenAI boss Sam Altman says Meta has offered $100 million signing bonuses to his staff. Kit Juckes of Societe Generale says the current news flow is more chaotic for markets than the period around global financial crisis. Andrew Hollenhorst of Citi says investors should be less concerned about inflation given data so far despite uprated forecasts on higher oil prices. 'Bloomberg Brief' delivers the market news, data and analysis you need to set your agenda. (Source: Bloomberg)
Bloomberg
an hour ago
- Bloomberg
Euro Zone Is Still Held Back by Rising Mortgage Rates, ECB Finds
Household consumption in the euro area will remain restrained for some time as past interest-rate hikes continue to feed through to mortgages, according to research by the European Central Bank. The impact will be felt even after the ECB lowered its deposit rate to 2% from 4% starting in June 2024, economists at the Frankfurt-based institution wrote in a paper published Wednesday. That's because fixed-rate loans taken out when inflation was low are still expiring. Borrowing costs for those that are refinanced will jump to current levels.
