LONDON — Inflation in the United Kingdom rose to 3.5% in April, its highest level since January 2024, according to data released Wednesday by the Office for National Statistics. The increase, measured by the consumer prices index, was attributed to rising household bills, including energy and water costs.
April’s inflation rate marked a jump from 2.6% in March, surpassing economists’ expectations of a 3.3% increase. It was the sharpest monthly rise since October 2022, when inflation spiked amid the energy crisis following Russia’s invasion of Ukraine.
Economists had anticipated a notable uptick due to annual price hikes in utility bills, an increase in business taxes, and the national minimum wage hike introduced in April.
Rate Cuts Under Scrutiny
The Bank of England’s inflation target remains at 2%. With inflation exceeding that benchmark, pressure is mounting over the timing and pace of future interest rate decisions. Last August, the Bank began easing its main interest rate from a 16-year high of 5.25%, reducing it by a quarter-point every three months. Earlier this month, the rate was lowered to 4.25%.
However, Bank of England Chief Economist Huw Pill said Tuesday that the pace of rate cuts may have been too aggressive, signaling caution over persistent inflation. Rob Wood, chief U.K. economist at Pantheon Macroeconomics, warned that further rate reductions on a “precise quarterly schedule” are “far from certain.”
Political Reactions
The Labour government, which came to power in July 2024, has pointed to positive indicators such as better-than-expected first-quarter growth and new trade deals with the United States, India, and the European Union, with whom post-Brexit relations have entered a new phase.
Still, Treasury chief Rachel Reeves called the inflation figures “disappointing,” acknowledging the ongoing strain on households. Conservative Party spokesperson Mel Stride, representing the Labour opposition, blamed Reeves’ business tax policies for contributing to inflationary pressure.
