UK inflation soars to 3.5% in fresh blow to Rachel Reeves as April price hikes add pressure to household costs

Alsharq Tribune- Mohamed Otaify 

UK inflation rose to 3.5 per cent in the year to April 2025, up from 2.6 per cent in March, according to the Office for National Statistics.

The jump from 2.6 per cent in March marks a sharp rise in the cost of living for households.

This rise in inflation means the overall cost of living is rising more quickly again, with households feeling the pressure from more expensive goods and services.

It may also pressure the Bank of England to hold interest rates higher for longer, undermining Rachel Reeves’s efforts to stimulate growth through recent rate cuts.

Prices jumped by 1.2 per cent in April alone, compared to a smaller 0.3 per cent rise during the same month last year.

The steep monthly increase reflects a wave of April price hikes including a 6.4 per cent rise in Ofgem’s energy price cap, along with sharp increases in water charges, council tax, broadband, mobile bills, and TV licences.

The rise marks the highest inflation rate in over a year and could put fresh pressure on the Bank of England to reconsider future interest rate cuts, just weeks after it lowered the base rate to 4.25 per cent

Many firms are also thought to have responded to April’s National Insurance hike and minimum wage increase by raising prices to offset higher costs, contributing to the rise in inflation.

Many experts had predicted a rise above three per cent for April's figure. Julien Lafargue, chief market strategist at Barclays Private Bank, said: "April is likely to show UK headline inflation jump back up above three per cent," citing National Insurance rise for businesses as a key catalyst.

Kevin Mountford, co-founder of Raisin UK, says longer-term pressures could push inflation even higher by the end of the year, fuelled by rising energy and utility bills, and external factors such as fallout from Trump-era tariffs.

He warned inflation could climb as high as 3.7 per cent by the end of the year, driven by increases to energy and utility bills, including water.

Mountford explained that rising inflation, combined with the lingering effects of Trump-era tariffs, poses a challenge for the Bank of England following its recent interest rate cut.

While the move was aimed at easing pressure on borrowers, higher prices continue to squeeze both businesses and households with firms facing rising costs and consumers needing to stretch their budgets further.

He said: "Clearly a lot will have been learned through the cost of living crisis but it remains imperative that UK consumers look to budget effectively and cut out unnecessary spending by continuing to shop wisely.

"For consumers, reviewing outgoings such as insurances, mobile and TV deals and switching to alternative products and providers or cancelling unused subscriptions altogether, can result in significant savings.

"If you are looking to switch, do take into account the costs that can be associated with this to make sure it is worthwhile for you."