Awful April bill hikes set to send inflation soaring

UK inflation is expected to jump to its highest level for over a year when official figures are released on Wednesday after “awful April” bill hikes sent the cost of living soaring.

Most economists predict the Office for National Statistics will reveal inflation surged to 3.3% last month, up from 2.6% in March.

A rise to 3.3% would see Consumer Prices Index (CPI) inflation rise to its highest level since March 2024.

It comes after Ofgem’s energy price cap rose by 6.4% in April, having fallen a year earlier, alongside a raft of bill hikes for under-pressure households, including steep increases to water charges, as well as rises for council tax, mobile and broadband tariffs, and TV licences among many others.

But experts said inflation may also have been pushed higher as many firms responded to the Government’s move to raise national insurance contributions (NICs) and the minimum wage last month by increasing prices.

Julien Lafargue, chief market strategist at Barclays Private Bank, said: “April is likely to show UK headline inflation jump back up above 3%.

“This is driven by a number of one-off adjustments including the new national insurance contributions and the increased national living wage.

“There is also the impact of Easter, which fell squarely in April in 2025 but was in March in 2024.”

The figures will be watched closely for clues as to when the Bank of England may look to cut rates again.

The Bank reduced rates to 4.25% from 4.5% earlier this month after inflation had recently eased back, while it also lowered its CPI forecast for the rest of 2025.

It said CPI was on track to peak at 3.5% in the third quarter of this year, down from the 3.7% high previously pencilled in.

But Robert Wood at Pantheon Macroeconomics is forecasting a rise to 3.6% for April, as he believes price rises by firms due to the wage cost pressures will have pushed it higher than the Bank predicts.

“Payroll tax hikes and the minimum wage increase that kicked in at the start of April are likely to be the perfect excuse for a range of firms to jack up prices, while food prices jumped in April according to the British Retail Consortium, and the Bank seems to be undercooking energy price rises,” he said.

However, it is hoped inflation will begin to climb back down by the end of the year.

Mr Lafargue said: “Beyond the short-term distortions, we believe the overall direction of travel for UK inflation is lower.

“This should provide the central bank with room to consider at least a couple more interest rate cuts this year, supporting favourable economic conditions going forward.”