Britain’s annual inflation rate rose sharply in April, driven by significant increases in energy, water, and other household bills, according to official data released on Wednesday, May 21.
The Consumer Prices Index (CPI) jumped to 3.5% in April, up from 2.6% in March, the Office for National Statistics (ONS) reported. This figure exceeded analysts’ expectations, which had forecast a rise to 3.3%, and marks the highest inflation rate recorded so far in 2024.
Finance Minister Rachel Reeves expressed concern over the figures, stating: “I am disappointed with these numbers because I know the cost of living is still weighing heavily on working families.”
The surge followed regulatory changes that allowed utility companies to raise household bills from April, reflecting volatility in global oil and gas markets as well as financial pressures faced by debt-laden water providers.
“Significant increases in household bills caused inflation to climb steeply,” said Grant Fitzner, acting director general at the ONS. “Gas and electricity prices rose compared to sharp declines at the same time last year. Water and sewerage charges also jumped, along with vehicle excise duty.”
Some relief may be on the horizon, as analysts predict energy prices could fall from July due to recent drops in global oil prices, spurred in part by U.S. President Donald Trump’s tariff policies.
Businesses were also impacted in April by a tax hike and an increase in the minimum wage, both implemented by the new Labour government after its July election win, which ended 14 years of Conservative rule.
Opposition criticism was swift. Conservative economic spokesperson Mel Stride blamed the rise in inflation on what he described as “Labour’s economic mismanagement.”
“Families are paying the price for Labour’s choices,” he said, arguing that higher business costs are being passed on to consumers.
Analysts warn that the inflation spike could affect the Bank of England’s approach to interest rate cuts. Richard Flax, Chief Investment Officer at Moneyfarm, noted: “The BoE’s next move is far from straightforward. The central bank is likely to remain cautious and may delay rate cuts until it sees more definitive signs that inflation is truly slowing.”