(qlmbusinessnews.com . Thurs 22nd May, 2025) London, UK —
April Inflation Spike Raises Fears of Prolonged Price Pressures Across UK
Despite brighter spring weather, April delivered a bleak economic surprise as UK inflation rose unexpectedly to 3.5% – the highest level recorded in over a year. Soaring energy and water bills, alongside persistently high costs for food, services, and air travel, have reignited concerns that inflation may prove more stubborn than previously forecast.
April marked the sharpest increase in water bills in more than 35 years, compounding the impact of elevated energy costs driven by global wholesale markets. Although wholesale energy prices are now easing, the lag in the UK’s billing system means consumers are unlikely to feel the benefit for some time.
There were one-off contributors to the spike: airfares surged due to a late Easter break, and vehicle excise duty rose. Yet beyond these temporary effects, services such as restaurants and hospitality are continuing to drive price pressures. Economists warn that rising wage costs and National Insurance Contributions are being passed directly onto consumers.
While pay growth is still outpacing inflation for many households—offering some respite—the recent rise may delay expectations of a rapid return to the Bank of England’s 2% inflation target. Forecasters suggest inflation could edge higher still over the coming months and may not dip below 3% until sometime in 2026.
These concerns are likely to influence the Bank of England’s interest rate decisions. Analysts now expect only one further rate cut this year, a scenario that could disappoint homeowners hoping for relief on mortgage repayments.
There are, however, some external forces that may ease inflationary pressure. Global commodity prices have been dampened by economic uncertainty tied to former US President Donald Trump’s escalating trade policies. This has already helped lower oil prices and could reduce petrol costs and food price inflation in the UK. Additionally, the UK–EU deal reached this week may offer further cost benefits in certain import sectors.
Even so, the outlook remains volatile. As Chancellor Rachel Reeves conceded, inflation continues to hurt household budgets—especially among those whose earnings are not keeping pace with rising costs.
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