Inflation surges to 3.5% due to April bill shock | Money News

The pace of inflation surged last month to an annual rate of 3.5%, its highest level in more than a year, according to official figures which blame hikes to essential household bills.

The Office for National Statistics (ONS) said the increase, up from a 2.6% rate in March, was explained by an unusual increase to energy bills during April and steeper rises for other staples such as council tax and water.

Households on the energy price cap saw a rare spring rise of 6.4% in April while council tax bills were widely up by the 5% level.

Money latest: Reaction to inflation spike

The water regulator allowed suppliers to charge customers an extra £10 per month, on average, across England and Wales while broadband, mobile and TV licence costs also rose.

The consumer prices index measure of inflation is closely-watched as rising numbers make it difficult for the Bank of England to cut interest rates – raised sharply by the Bank from December 2021 to tackle the infancy of the cost of living crisis.

There have been four cuts since August last year, as easing inflation has allowed.

In advance of the ONS data, financial markets had fully priced in two further interest rate reductions this year, with no change expected at the Bank’s next rate-setting meeting in mid-June.

The inflation numbers also make for tough reading at the Treasury, where chancellor Rachel Reeves is juggling several challenges.

While the recent economic growth figures have been encouraging, economists widely expect hikes to consumer bills to apply a further choke to consumer spending in the months ahead.

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