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UK inflation setback for Labour as ‘Awful April’ hits households

“Awful April” turned out to be even more awful than expected.

Hikes in energy and water bills, council tax and rail fares pushed British inflation back up to 3.5 percent last month, the highest since January last year, the Office for National Statistics said Wednesday. The ONS’s broadest measure of inflation (CPIH), which includes a bigger component of housing related costs, rose to an even higher 4.1 percent.

The rise was sharper than expected, and illustrates how government-regulated prices have nullified disinflation in the private sector this year. It also casts doubt on the Bank of England’s forecasts, which see a brief rebound in inflation to 3.7 by September before it comes back down in a more sustained fashion. Inflation has already been above the BoE’s 2 percent target for four years.

Much of the rise was due to the 6.4 percent rise in regulator Ofgem’s benchmark for household energy bills, which tracks international wholesale energy prices closely. However, other elements which contributed to the increase were entirely domestic affairs, such as water, where Labour has allowed a sharper-than-usual increase in bills to address high levels of pollution that it sees as a legacy problem inherited from the last Conservative government.

Ofgem’s seasonal adjustments have caused the headline rate of inflation to fluctuate sharply ever since the Russian full-sale invasion of Ukraine began three years ago. The Bank believes that it is steadily bringing it under control, and expects to keep cutting interest rates “gradually and cautiously” this year.

Even chief economist Huw Pill, who voted against the Monetary Policy Committee’s decision to cut the Bank Rate to 4.25 percent this month, said Tuesday that “the underlying disinflation process remains intact and … that the prospective path of Bank Rate from here is downward.” 

LP Staff Writers

Writers at Lord’s Press come from a range of professional backgrounds, including history, diplomacy, heraldry, and public administration. Many publish anonymously or under initials—a practice that reflects the publication’s long-standing emphasis on discretion and editorial objectivity. While they bring expertise in European nobility, protocol, and archival research, their role is not to opine, but to document. Their focus remains on accuracy, historical integrity, and the preservation of events and individuals whose significance might otherwise go unrecorded.

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