Figures released today (21) showed inflation jumped to 3.5 per cent in the year to April, driven largely by increases in household bills, energy costs, airfares and council tax.
The surge in the consumer prices index (CPI) recorded by the Office for National Statistics came after a decline in the rate over the first quarter of the year to 2.6 per cent in March.
In April, households were hit by sharp rises in energy and water bills, and – to a lesser extent – higher food prices. Firms were also hit by higher costs - a rise in employer National Insurance contributions and a higher minimum wage.
A jump in air fares over the Easter holiday was a driver of the sharp climb.
Britain now has the second-highest inflation rate of any major Western European economy, behind the Netherlands.
The data will add to unease over the outlook for Britain's economy which grew strongly in early 2025 but is likely to slow.
Finance minister Rachel Reeves said she was disappointed.
"We are a long way from the double-digit inflation we saw under the previous administration, but I'm determined that we go further and faster to put more money in people's pockets," Reeves said.
Responding to the latest CPI inflation figures, which show headline inflation rising to 3.5 per cent and food inflation rising to 3.4 per cent, Kris Hamer, Director of Insight at the British Retail Consortium, said, “Headline inflation accelerated in April as additional costs from rising National Living Wage and Employers’ NI costs filtered through to prices faced by consumers, as well as rising costs of utilities (energy, water and broadband).
"The jump in labour costs pushed up food inflation, which climbed above 3%. However, there was some good news for furniture and clothing shoppers as prices fell year on year, with retailers offered good promotions on summer apparel and electricals.
"Even with food prices rising overall, there were still deals to be had, with prices of dairy products such as milk, cheese and eggs falling on the month.
“Rising inflation was inevitable following the wave of additional costs hitting employers, and particularly retailers who employ over 3 million people across the country.
"For months retailers have been warning that rising costs would lead to higher prices.
"To mitigate this, the government must now find ways to help reduce business costs and regulatory burden. It is imperative that its Employment Rights Bill targets unscrupulous employers and avoids burdening responsible businesses with additional costs which could put retail job numbers into reverse.”
