April’s rate of inflation is higher than economists had predicted.
The pace of price rises was forecast to be around 3.3%.
The Bank of England has previously said it expects inflation to spike at 3.7% between July and September 2025 before dropping back to its 2% target.
In April, households were hit by sharp rises in energy and water bills, and – to a lesser extent – higher food prices. Firms were also hit by higher costs – a rise in employer National Insurance contributions and a higher minimum wage.
The ONS says prices of water and sewerage rose by 26.1% in April, which it said is the largest rise since at least February 1988.
It’s a combination of those factors that has driven inflation higher.
Meanwhile, the cost of services rose 5.4% in the year to April, which economists said was due to changes to National Insurance Contributions for employers and higher minimum wage coming into force.
Services inflation refers to rises in prices for services like eating at a restaurant, getting a haircut, or going to the cinema.
Britain is a services-led economy which means that more of our jobs come from providing a service rather than making a product.
