Britain’s inflation rate surged more than anticipated in April, reaching its highest level in 15 months. The Consumer Prices Index (CPI) climbed to 3.5%, a sharp increase from 2.6% in March, according to the latest Office for National Statistics (ONS) data. Analysts had forecasted a rise to 3.3%, but the inflation rate exceeded expectations. This marks the highest inflation rate since the start of 2024.
Finance Minister Rachel Reeves expressed her disappointment with the rise, acknowledging the ongoing financial strain on households. The increase was primarily driven by higher energy and water bills, following price hikes approved by UK regulators in April. Rising oil and gas prices and the financial difficulties of water suppliers influenced these adjustments. The ONS highlighted that gas, electricity, water, and sewerage bills increased significantly, increasing the inflation rate. Additionally, vehicle excise duties and other taxes also contributed to the rise.
While energy prices are expected to fall in July, analysts predict that these reductions will be gradual due to recent drops in oil prices. In the meantime, businesses faced added pressures from a tax increase and a rise in the minimum wage, which were implemented last month under the newly elected Labour government. These factors have been blamed for pushing inflation higher, with Conservative critics accusing Labour of poor economic management.
The Bank of England may reassess its strategy for interest rate cuts in light of the latest inflation data. Analysts suggest that the central bank may proceed cautiously and delay further rate reductions until inflationary trends show clear signs of easing.
