Rachel Reeves nightmare as UK inflation surges 3.5% after ‘awful April’ price hikes

UK inflation surged to its highest level for more than a year last month after households were hit by a raft of "awful April" bill increases, official figures have revealed, delivering a huge blow to Chancellor Rachel Reeves. The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation hit 3.5% in April, up from 2.6% in March and the highest since January 2024.

Economists had been expecting a rise to 3.3% last month. It comes after Ofgem's energy price cap rose by 6.4% in April, having fallen a year earlier, alongside a raft of bill rises for under-pressure households, including steep increases to water charges, council tax, mobile and broadband tariffs. ONS acting director-general Grant Fitzner said: "Significant increases in household bills caused inflation to climb steeply.

"Gas and electricity bills rose this month compared with sharp falls at the same time last year due to changes to the Ofgem energy price cap.

"Water and sewerage bills also rose strongly this year, as did vehicle excise duty, which all pushed the headline rate up to its highest level since the beginning of last year."

Cabinet minister Steve Reed acknowledged the rise in inflation was "disappointing".

The Environment Secretary told Times Radio: "I recognise these are disappointing figures. I know how much people are struggling with the cost of living crisis, but no one said that this problem could be fixed overnight.

"And I think you have to look at these figures in the round, we've brought double-digit inflation way down now.

"We're stabilising the economy. We're putting money back in people's pockets with an increase in the minimum wage that puts £1,400-a-year into the pockets of some of the lowest paid.

"We've seen fuel duty frozen. We've had four interest rate cuts in a row now, and for the first quarter of this year, we now have the fastest growth in the G7 so there's a lot of positive information out there as well."

However, Shadow chancellor Sir Mel Stride blamed Rachel Reeves for the hike in inflation.

He said: "This morning's news that inflation is up - and now well above the 2% target - is worrying for families.

"We left Labour with inflation bang on target, but Labour's economic mismanagement is pushing up the cost of living for families - on top of the £3,500 hit to households from the Chancellor's damaging jobs tax.

"Higher inflation could also mean interest rates stay higher for longer, hitting family finances hard.

"Families are paying the price for the Labour Chancellor's choices."

Speaking before the release, 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.”

He also noted the timing of Easter, which landed in April this year compared to March in 2024, may have skewed the figures.

The rise presents a major challenge for Ms Reeves, who has staked her credibility on bringing stability back to the economy.

The Bank of England cut interest rates earlier this month—from 4.5% to 4.25%—citing easing inflation and revising down its CPI forecast for the rest of 2025.

But the latest data threatens to undermine that narrative.

The Chancellor will today emphasise the UK Government's push to provide stability among turmoil across the world, as she meets her counterparts from the G7 group of nations: Canada, France, Germany, Italy, Japan, and the United States.

Ms Reeves will insist that the UK is open for business to other nations, after a trio of deals with the US, India and the EU have been struck in the last few weeks.

Speaking ahead of her visit, Ms Reeves said: "This Government is laser-focused on delivering for the British people.

"That's why in the past two weeks we have struck three major deals with the US, EU and India that will kick-start economic growth and put more money in people's pockets as part of our Plan for Change.

"The world is changing, but we have shown in recent weeks that Britain is a strong economy that can navigate that change and we are once again a nation that is open for business."