Costs within the UK had been 3.5% greater in April 2025 in comparison with the identical month a 12 months earlier, based on the Workplace for Nationwide Statistics (ONS). This marks the best inflation fee since January 2024 and exceeds economists’ expectations of a extra modest rise to three.3%.
By comparability, inflation stood at 2.6% within the twelve months to March 2025.
On a month-to-month foundation, client costs rose by 1.2% in April, up sharply from a 0.3% improve in March.
Economists had anticipated a big bounce in April, pushed by substantial annual will increase in numerous family payments. The rise additionally displays the affect of upper enterprise taxes and a notable improve within the minimal wage.
In line with the ONS, the principle contributors to the rise in inflation had been greater prices in housing and family providers, transport, and recreation and tradition. These had been partially offset by falling costs in clothes and footwear.
What’s on the horizon for UK inflation and key rates of interest?
Inflation is extensively anticipated to stay above 3% for the remainder of the 12 months, which might mood expectations of additional rate of interest reductions from the Financial institution of England, whose inflation goal is 2%.
On Tuesday, the financial institution’s chief economist, Huw Tablet, mentioned that borrowing charges have been minimize too rapidly — a sign that he’s involved about underlying inflationary pressures.
For the reason that BoE started chopping borrowing prices final August from a 16-year excessive of 5.25%, the financial institution has proceeded on a gradual foundation by reducing its essential rate of interest by 1 / 4 of a proportion level each three months. Earlier this month, it decreased it to 4.25%.
Following the most recent inflation replace, Rob Wooden, chief UK economist at Pantheon Macroeconomics, mentioned that cuts on a “exact quarterly schedule” are “removed from sure.”
Though inflation is anticipated to stay above the financial institution’s goal this 12 months, economists count on it to say no in 2026, partly because of a latest commerce deal between the US and the UK, which rolled again among the tariffs beforehand proposed by US President Donald Trump.