A rise in the cost of household bills and food has pushed inflation in the UK to its highest rate in more than a year.
Data from the Office for National Statistics (ONS) shows the Consumer Prices Index (CPI) rose by 3.5% in April, a significant uplift from the 2.6% recorded in March and above analysts’ forecasts of around 3.3%.
The largest upward contributors were from housing and household services, transport, and recreation and culture. Water, gas and electricity prices all went up on 1 April, along with a host of other bills.
Food inflation also climbed to 3.4% in April, from 3.0% the month before. The upward effects came from meat, mineral water, bread and cereals, and sugar and jam, while the downward effects came from vegetables, milk, cheese and eggs. Several categories saw double-digit year-on-year rises, including butter (19.9%), chocolate (14.6%), lamb and goat (13.8%), beef and veal (12.2%), and cocoa and powdered chocolate (10.2%).
Balwinder Dhoot, Director of Industry Growth and Sustainability at the Food & Drink Federation (FDF), commented: “We’re concerned to see food and non-alcoholic drink inflation climb again to 3.4% in April 2025. Food and drink manufacturers said they expect production costs to rise an average of 4.8% over the next 12 months as a result of rising energy and commodity prices alongside regulatory costs such as increases to National Insurance Contributions and a new £1.4bn packaging tax. We therefore forecast food and non-alcoholic drink inflation will average 4.3% over 2025.”
He added: “It’s imperative that the government reflects the importance of our sector to the UK economy and the nation’s food supply by making growth a top priority in its upcoming Food and Industrial strategies. An enhanced trading arrangement with the EU marks a positive step towards driving growth for UK businesses, and the government should engage with industry to ensure this agreement represents their interests, as well as continuing to cut red tape to enable food manufacturers to invest in productivity.”
The Bank of England has previously said it expects overall consumer inflation to spike at 3.7% between July and September 2025 before dropping back to its 2% target.
Analysts previously predicted two additional interest rate cuts this year, but the latest inflation data now throws that into doubt, with some economists thinking there could only be one.
Huw Pill, chief economist and executive director for monetary analysis at the Bank of England, said he feared the Bank was reducing rates too rapidly and that the momentum behind falling inflation was “stuttering”.
Economists have questioned whether the inflation numbers may have also been pushed higher due to firms passing on costs after the Chancellor’s decision to raise employer national insurance contributions and the minimum wage last month.
Shadow Chancellor Sir Mel Stride blamed Labour’s “damaging” tax increase for the rise in inflation. He said: “We left Labour with inflation bang on target, but Labour’s economic mismanagement is pushing up the cost of living for families, on top of the £3,500 hit to households from the Chancellor’s damaging jobs tax. Families are paying the price for the Labour Chancellor’s choices.”
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