According to the UK Office for National Statistics, in April 2025 prices in the UK were 3.5% higher than in the same month the previous year. This is the highest rate of inflation since January 2024 and exceeds economists' expectations for a more modest rise to 3.3%, Euronews reported.

By comparison, inflation stood at 2.6% in the twelve months to March 2025.

On a monthly basis, consumer prices rose 1.2% in April, up sharply from 0.3% in March.

Economists had expected a significant jump in April, driven by substantial annual increases in various household bills. The increase also reflected the impact of higher taxes on businesses and a significant increase in the minimum wage.

According to the statistics office, the main contributors to the rise in inflation were higher spending on housing and utilities, transport and recreation and culture. These were partly offset by a fall in clothing and footwear prices.

Inflation is expected to remain above 3% until the end of the year, which could dampen expectations of further interest rate cuts by the Bank of England, whose target is 2%.

On May 20, the bank's chief economist Hugh Peel said lending rates had been cut too quickly - an indication that he was concerned about underlying inflationary pressures.

Since the Bank of England began cutting borrowing costs from a 16-year high of 5.25 percent last August, the bank has acted gradually, lowering its base rate by a quarter percentage point every three months. Earlier this month, it cut it to 4.25%.

Following the latest inflation update, Rob Wood, chief UK economist at Pantheon Macroeconomics, said cuts on a "precise quarterly timetable" were "far from certain".

Although inflation is expected to remain above the Bank's target this year, economists expect it to fall in 2026, partly due to the recent US-UK trade agreement, which scrapped some of the tariffs previously proposed by US President Donald Trump. | BGNES