UK Inflation Surges to 3.5% in April Amid Increasing Household Costs
The UK’s annual inflation rate jumped to 3.5% in April, up sharply from 2.6% in March, according to data released by the Office for National Statistics (ONS) today.
This marks the highest level of inflation since January 2024, driven by a significant rise in household bills, transport costs, and food prices.
A major contributor to April’s inflation spike was the increase in energy and utility costs. Ofgem’s latest energy price cap adjustment resulted in a 6.7% annual rise in energy prices, with gas prices up 7.5% and electricity up 2.9%.
Water and sewerage bills also surged by 26.1%—the steepest increase since records began in 1988.
Transport costs were another significant inflationary driver. Airfares soared by 27.5%, influenced by strong demand during the Easter holiday season.
Additionally, increases in Vehicle Excise Duty (road tax), including for electric vehicles, added further pressure to consumer spending.
Food inflation remained elevated, with prices of meat, cereals, and bread continuing to climb. The overall annual rise in food and non-alcoholic beverage prices reached 3.4%.
Meanwhile, policy-related changes also contributed to the price increases. The government’s recent hike in the National Minimum Wage by 6.7%, along with an estimated £25 billion rise in employer National Insurance contributions, raised operating costs for businesses—costs that were largely passed on to consumers.
Core inflation, which excludes food and energy, climbed to 3.8% in April, up from 3.4% in March. Services inflation, closely monitored by the Bank of England as a gauge of domestic price pressures, increased to 5.4%, from 4.7% the previous month.
The unexpected rise in inflation has sparked debate over the timing of future interest rate cuts. The Bank of England has reduced its base rate from 5.25% to 4.25% since August 2024, but analysts now believe further reductions may be delayed.
Chancellor Rachel Reeves acknowledged the data as a setback, stating: “We are deeply concerned about the continued cost-of-living pressures on households. The government remains committed to supporting families through this period.”
However, business leaders, particularly in the hospitality sector, have criticized the government’s recent tax and regulatory measures, blaming them for exacerbating cost pressures.
Following the inflation announcement, the British pound surged to its highest level against the dollar since 2022, reflecting shifting investor expectations that interest rates may remain elevated for longer.
Some argue that April’s rise is temporary, driven by one-off factors such as seasonal travel and tax changes.
Others warn that persistent services inflation could make it harder for the Bank of England to return inflation to its 2% target anytime soon.
