Data from the Office for National Statistics (ONS) showed that inflation rose to 3.6 per cent in April, up from 2.6 per cent in March – the largest month-on-month rise in two and a half years.
While UK inflation had been gradually coming down this year, from 3.0 per cent in January, the rise for April’s data was not unexpected as it accounts for bill hikes, energy costs increasing and changes to social housing costs.
April also saw a later than usual Easter weekend, as well as businesses dealing with changes to labour costs – plus the uncertainty created by the beginning of Donald Trump’s tariffs.
January 2024 was the last time the consumer price index (CPI) rate of inflation was running above 3.5 per cent (at the time 4.0 per cent).
Data for CPIH, which includes housing costs, was running at 3.4 per cent in March and came in at 4.1 per cent for April.
ONS Acting Director General Grant Fitzner said: “Significant increases in household bills caused inflation to climb steeply. Gas and electricity bills rose this month compared with sharp falls at the same time last year due to changes to the Ofgem energy price cap.
“Water and sewerage bills also rose strongly this year as did vehicle excise duty, which all pushed the headline rate up to its highest level since the beginning of last year.
“This was partially offset by falling prices for motor fuels and clothing, driven by heavy discounting for children’s garments and women’s footwear.”
April’s data is likely to be a major factor for the Bank of England when it comes to deciding whether to make successive cuts to the interest rate next month.
The BoE’s Monetary Policy Committee cut the Bank Rate to 4.25 per cent in early May, with the next session coming on 19 June. Many economists have predicted an immediate second cut, but with inflation always expected to head back up for April’s data – away from the government-set target of 2.0 per cent – the MPC will be paying attention to exactly where the inflationary pressures stem from before deciding on a third rate cut of the year.
The Food and Drink Federation (FDF) forecast that food inflation will reach around 4.3 per cent this year, a lower estimate now than was predicted earlier in 2025.
However, the FDF point out the industry is still facing cost pressures from higher energy bills, rising commodity prices and more costs from regulatory changes. Rises to employer contributions to National Insurance are estimated to cost the sector more than £400m annually.
