UK inflation rises to its highest level since January 2024 after domestic bills spike

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This article was published 21/05/2025 (479 days ago), so information in it may no longer be current.

LONDON (AP) — Inflation in the U.K. spiked to its highest level for more than a year in April amid a raft of higher domestic bills, such as energy and water, official figures showed Wednesday.

The Office for National Statistics said that its key measure of inflation, as measured by the consumer prices index, rose by 3.5% in the year to April, up from 2.6% in March.

April’s rate was the highest since January 2024 and above expectations for a more modest increase to 3.3%.

The scale of the rise was also the largest since October 2022, at the height of the energy crisis in the wake of Russia’s full-scale invasion of Ukraine.

Economists had anticipated a sizeable increase as April saw hefty annual price rises for an array of household bills, as well as the impact of higher taxes on businesses and a sizeable increase in the minimum wage.

Inflation is widely expected to stay above 3% for the rest of the year, which could rein in expectations of further interest rate reductions from the Bank of England, whose target for inflation is 2%.

On Tuesday, the bank’s chief economist, Huw Pill, said that borrowing rates have been cut too quickly, in a sign that he’s concerned about underlying inflation pressures.

Since it started cutting borrowing costs last August from the 16-year high of 5.25%, the bank has proceeded on a gradual basis by lowering its main interest rate by a quarter of a percentage point every three months. Earlier this month, it reduced it to 4.25%.

Following the latest inflation update, Rob Wood, chief U.K. economist at Pantheon Macroeconomics, said that cuts on a “precise quarterly schedule” are “far from certain.”

Even though inflation is expected to run above the bank’s target this year, economists expect it to fall next year, partly because of the recent trade deal between the U.S. and the U.K. which will mean many of the tariffs that U.S. President Donald Trump had planned have been ditched.

Still, the sharp increase in inflation is a tricky moment for the Labour Party government, which returned to power last July for the first time in 14 years. In recent weeks, Labour touted what it considers to be economic successes, including higher than anticipated first-quarter growth and a trio of trade deals. As well as the tariff pact with the U.S., the government has concluded a trade deal with India and reset the United Kingdom’s relationship with the European Union after Brexit.

“I am disappointed with these figures, because I know cost of living pressures are still weighing down on working people,” Treasury chief Rachel Reeves said.

The main opposition Conservative Party, which Labour replaced in power, sought to pin the blame on Reeves’ decision to increase the tax burden on businesses.

“Families are paying the price for the Labour Chancellor’s choices,” said Mel Stride, the Tories’ economy spokesman.