Latest CPI figures fuel debate over the Bank of England's next move
UK consumer price inflation fell to 2.8% in April, down from 3.3% in March, according to data published on Wednesday by the Office for National Statistics (ONS).
The fall, which exceeded analyst forecasts, was largely driven by lower electricity and gas prices.
"There was a notable fall in annual inflation led by lower electricity and gas prices," said ONS chief economist Grant Fitzner. "This was due to the government's energy bill support package reducing variable and fixed tariffs, along with lower global wholesale energy prices before the conflict in the Middle East, which fed through to the reduction in the Ofgem cap.
"Smaller rises in water and sewage bills and Vehicle Excise Duty than seen last year also helped pull the rate down. Food prices, particularly for chocolate and meat products, and the price of package holidays drove inflation down further. These were only partially offset by a further increase in petrol and diesel prices, and an uptick in the cost of clothing and footwear.
"The annual cost of both raw materials and goods leaving factories continued to rise, driven again by higher crude oil and petrol prices."
The Consumer Prices Index (CPI) rose by 2.8% in the 12 months to April 2026, down from 3.3% in the 12 months to March 2026.
— Office for National Statistics (ONS) (@ONS) May 20, 2026
Read more ➡️ https://t.co/yLA9huQ2mV pic.twitter.com/5QYW40q9r0
Prior to the US-Israeli war on Iran commencing on 28 February, the Bank of England had projected inflation would be close to its 2% target in April. The energy price shock resulting from the conflict has since prompted the Bank to revise its forecasts sharply upward, with inflation potentially reaching 6.2% in early 2026 under its most inflationary scenario.
Chancellor Rachel Reeves is expected to announce further cost-of-living measures on Thursday, including a possible cancellation of the fuel duty rise scheduled for September.
Financial markets are currently pricing in two quarter-point rate rises from the Bank of England this year, with the possibility of a third.
Nathan Emerson (pictured right), chief executive of industry body Propertymark, offered a cautious assessment. "It is very welcome news to see inflation dip this month; however, today's figures still sit some distance away from the Bank of England's target rate of 2%," he said.
"It remains difficult to precisely foresee potential hurdles many consumers may face over the coming months. It is important that people consider real-world disruption, such as possible higher mortgage rates and increases in energy prices, as the year plays out.
"Should people find themselves in a position where they are worried about their mortgage repayments, they should proactively speak with their lender at the very first opportunity, as they have a duty to help where possible and will also be keen to do so if they can."
Rob Clifford (pictured right), chief executive of mortgage and protection network Stonebridge, highlighted the difficulty of predicting the Bank of England's next move. "Rate setters have the benefit of one more inflation reading before they have to make their next decision," he noted.
"That makes it an incredibly hard one to call this early. The energy shock hasn't gone away, and pretending it has would be a mistake. This is no time to delay a mortgage application. As much as we may wish to, we can't see round corners and locking in rates is the order of the day. Borrowers can always swap to a better deal if rates come down.
"We reported last week how the proportion of borrowers opting for trackers had trebled annually in April to 12%. This suggests many of them don't think the Middle East conflict will last for too long and want to see their mortgage payments come down once rates fall. We hope they're right and, when the next inflation data lands, we'll get a good sense of how problematic rising wage demands and input costs for businesses are likely to be."
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