Inflation surprise suggests the outlook could be gloomier than we thought
Summary
Inflation in the UK rose to 3.5% in April, mainly due to increased energy, water, and service costs. While pay rises are helping some people keep ahead of inflation, overall prices are expected to stay high for a while longer.Key Facts
- UK inflation reached 3.5% in the 12 months to April.
- Energy and water bills were major contributors to the rise in inflation.
- There was a significant increase in airfare costs in April due to late Easter holidays.
- Some pay rises are still outpacing inflation, helping workers maintain purchasing power.
- Global energy costs are falling, but lower bills for customers will take time.
- Inflation in services, like restaurants, remains high.
- Economists expect inflation to stay under 4% and not drop to 3% until next year.
- The Bank of England may cut interest rates only once more this year.
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